Son's mortage

dreamon100

Hi, unfortunately my son's relaitionship has broken up. There is a joint mortage which he can not afford to take on by himself. Is there a 'best' way to help him out. Thanks in advance.

HGLTsuperstar

Do you mean he already has the joint mortgage with his ex? In which case, even if she moves out, she is still jointly liable. Need some more info, what does your son want to do, i.e. buy her out, sell and split the proceeds or???

dreamon100

What we were thinking of doing is buying her out, the mortage has only been going for 8-9 months and has a penalty. I would have to take on her portion of the mortage, so as to keep him on the property ladder. Fortunately she is only looking to get her share of the deposit back, although if the penalty has to be paid I would prefer her to carry 1/2 of that.

dwight-van-man

Hiya, worth speaking to the lender to establish what their policy is in this situ, either direct or via your broker. The lender I work for will do what they can to retain the mortgage and in many cases we've gone way over normal multiples to allow the remianing party to keep the mortgage and not be charged a penalty (obviously whilst still remaining within affordability) Alternatively, adding a second party to the mortgage would be considered subject to their circumstances and as long as the mortgage itself isn't being redeemed, there should be no redemption penalty to pay.

HGLTsuperstar

How much equity is in the house? If there more than the amount she wants for her deposit, then you're on a good deal. Sounds like she just wants back what she put in, and keep it as civil and simple as possible. If so, don't knock it. How long is the penalty period, as perhaps you could arrange a private deal to take over her repayments in the meantime, all drawn up by solicitor of course.

vinno65

Hi Dreamon,
Back in the day when I was a young chap(hey ho!) I was in a similar situation. I bought my brother's girlfriend out of a property. It involved a transfer of equity(getting my name on the deeds and hers off) so solicitors fees etc come into play but no stamp duty etc. Work out how much your son's ex is after and see if you can agree amicably to a sum(taking into account the cost of a transfer of equity), then talk to the mortgagor about it.
regards Vinno