Buying into partners house

choco_bear

Hi, I am looking into buying into my partner's house. How do I go about this and what research should I do?

I currently live with her and pay her rent, but we would like for me to buy into the house and split it 50/50.

Thanks
Adam

Foxy-Stoat_3

First step would be to talk to the lender if you can be added to the mortgage, they will instruct a solicitor to add your name to the deeds. Shouldn't be more than £1000 to do this.

You will then have a legal 50% share in the equity (if any) and also be responsible for the debt liability.

Then you need to buy 50% of the current equity and pay this to your other half, possibly on or before the day your name gets added to the deeds.

Not sure if by adding your name to the deeds you would need to pay stamp duty, solicitor should advise you on this.

hazyjo

Sorry to be the voice of pessism, but what happens if you split up? Or are you putting cash in, so she could hopefully just remortgage for more again and pay you off what you paid in? Would you expect half, even though she's paid X off over X number of years (you said 50/50 so I presume so)? Would she end up out of pocket if you split up?

Nobody goes into a relationship thinking it won't last, but roughly half of even marriages fail.

Just pointing out the things you might not have wanted to think about, but should.

Good luck.

Jx

Foxy-Stoat_3

Cash needs to go to the partner directly or straight into the mortgage. If its 50/50 all the way then the 3 years equity paid will need to be taken into consideration but this won't be that much.

If the relationship ends then depending then the reverse wil have to happen, obviously more legal fees will need to be paid.

choco_bear

It's a tough situation to explain. My partner has lived there 8 years and a third of the house is hers, a third her sisters and my partner has been paying off the other third mortgage. Her sister hasn't lived there but wants to buy her own place, so she wants the money from the third of the house. I want to buy 50% of the house. My partner would then get money to give to her sister and we would end up owning 50/50. At least that's what I envisage happening. Unless you can point out any flaws? I know it's a strange situation.

Foxy-Stoat_3

Who "owns" the extra third that your partner has been paying for?

Is your partner's name solely on the mortgage/deeds and is there any other legal/financial interest in the property, ie another family member?

You'll need to know if the sister has an equity share or if she is named on the mortgage to work out how much cash to split up.

choco_bear

I have a feeling it is all in my partners name, but I will have to check. I think a couple years back they changed the mortgage/deeds all in to her name.

So what would be the first step, do we need to get the house valued before we can work out how much 50% of the mortgage would be?

Foxy-Stoat_3

Yeah, realistic house value needs to be agreed by all parties before you proceed any further.

Example;

Current house value £200,000,
Current outstanding mortgage £150,000,
£50,000 equity / 3 = £16,666 to each party,
Your partner needs to pay the sister £16,666 cash, either from the house or her own bank,
Your partners equity will now be £50,000, assuming she doesn't use the house equity,
You will need to pay £25,000 to the mortgage to be equal.
New mortgage in both your names - paying half each - legal fees will need to be factored in.

If your partner uses the equity in the house to pay the sister then your cash input reduces to £16,667.

Still need to find out who owns the other 3rd share though.

ging84

get married, job done

holly_hobby

Ok - this is essentially a transfer of equity.

In order to remove your partners sister from the mortgage and deeds, this will involve them conducting a status (income and credit check) on you.

If partners income is solely enough to service the mortgage, your only potential pitfall will be in relation to your credit standing.

Assuming that you meet the lenders status checks, then you can replace sister on the mortgage and deeds with your partner.

Moving to the deeds, your conveyencer will now be removing the sisters interest and amending the deeds to either joint tenancy (equal shares and automatic tsf of ownership to fellow mortgagor on death), or note the 50/50 share under a tenancy in common arrangment (ownership of each individual ringfenced, with no automatic tsf to fellow owners on death, but inclusion in the decds estate for bequest or following intestacy regs if no will in place).

TOE circa £500 & lender admin fee.

If the tsfd mge debt exceeds 250k, then you will be subject to SDLT as your effective pch of 50%, will exceed the nil rate SDLT threshold of 125k.

Hope this helps

Holly

choco_bear

The house is 100% in my partners name on the deeds. Just an informal agreement with her sister. This would make it easier for me to buy into the house wouldn't it?

So say the house is valued at £200k. I would then meet with a mortgage lender and they would assess my situation and hopefully lend me £100k to buy into the house?