Mortgage overpayment and buying friend out

Thrugelmir

PogMoma wrote: »

The flat is worth £380k at the moment and we're joint tenants.

It's a bit complicated but he will not claim anything from the property.

That's the straightforward scenario. Life sometimes throws a curved ball. Why all bases need to thought through and formalised.

TrickyDicky101

Also, you will have stamp duty to pay on the excess of the remaining mortgage over and above £250k at the time of the ToE (so another reason to make as many overpayments as possible to reduce SDLT payable).

Annisele

PogMoma wrote: »

It's a bit complicated but he will not claim anything from the property.

He might not want to - but without a Deed of Trust, he might have to.

What if he becomes ill, and needs to claim housing benefit? Or gets divorced, and his ex says your house forms part of his assets? Or goes bankrupt, and the official receiver says the same thing?

On the face of it, you both jointly own the whole house. He doesn't live in it - so if you sell, he might have to pay capital gains tax. Even if he's prepared to give you some money, he'll likely want you to cover his tax bill.