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Remortgage on co-owned property

Annabanana123
Annabanana123 Posts: 3 Newbie
in House buying, renting & selling
Hi all,

I have a query I am hoping somebody can shed some light on. My partner co-owns a property with his ex father in law which they rent out. We are looking to buy a house together using equity from my house sale and he would like to remortgage his half of his owned property to enable us to put a large deposit down on our new buy. However, his father in law has stated that he can't do this; that it will devalue his half of the house. Our mortgage advisor says there won't be a problem with this and that it is straightforward to arrange; the monthly rent that they earn will in effect pay off the new mortgage on my partner's half.

Can the father in law put a stop to this? My partner does not as yet want to sell up but we are itching to buy together.

Advice please?!

Comments

  • Kynthia
    Kynthia Posts: 5,692 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    You can't mortgage half a property. You mortgage a whole property and all the owners must be named on the mortgage and jointly responsible for the debt. Your partner can't make the joint owner take out a mortgage against their will.
    Don't listen to me, I'm no expert!
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    edited 24 July 2015 at 7:10AM
    Your partner can't just remortgage "his half" of the BTL property. He would either have to remortgage with another joint mortgage with the ex-FIL (for the whole property) or he would have to sell his share to the ex-FIL meaning the ex-FIL would have to remortgage in his name only. Either scenario would require the agreement and cooperation of the ex-FIL.

    Having a mortgage on a property doesn't devalue it. A larger mortgage could mean less profit though.
  • Annabanana123
    Annabanana123 Posts: 3 Newbie
    Does the fact that they own it outright change anything? It was the mortgage advisor that made the suggestion of remortgaging his half.

    Thanks for your advice so far.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    I'd be interested to know what lender the mortgage advisor has in mind for only mortgaging half a property. It doesn't really matter if there is no mortgage on the property now or not. Lenders don't like having people named on the deeds that aren't named on the mortgage.
  • Annabanana123
    Annabanana123 Posts: 3 Newbie
    I will find that out. I'm a little perplexed as to why the FIL has just said no without any negotiation.
  • silvercar
    silvercar Posts: 51,194 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    Annabanana123 wrote: »
    I will find that out. I'm a little perplexed as to why the FIL has just said no without any negotiation.

    FIL would be jointly liable for the whole of the mortgage, even if you had a private agreement.

    Lenders insist that the names on the mortgage match the names on the deeds.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
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