Selling with a 50/50 mortgage

Kimjo1990

Hi, i was wondering if anyone had any advice on selling a 50% share of a house. Basically i live with a friend and we did a 50/50 mortgage. I have now got a job elsewhere and would like to move closer to work but im unsure how you even start to sort out selling my share to my friend and get my name taken off the deeds of the house. Any advice would be appreciated.

Thankyou.

sal_III

Two amicable options:

A) Your fiend finds the money to buy you out (cash or mortgage), based on your equity and/or price you both agree on. Your name is taken of the deed, your friend re-mortgages in his name only at the same time.

If your friend can't/won't buy you out, you can sell the property, repay the mortgage and split what's left between you.

And the following is the main reason not to buy properties with friends:

C) Your friend can't won't buy you out, but refuses to sell and/or move out of the property - you are stuck to continue repaying the mortgage until you can win a (likely costly) court case to force the sale.

saajan_12

Kimjo1990 wrote: »

Hi, i was wondering if anyone had any advice on selling a 50% share of a house. Basically i live with a friend and we did a 50/50 mortgage. I have now got a job elsewhere and would like to move closer to work but im unsure how you even start to sort out selling my share to my friend and get my name taken off the deeds of the house. Any advice would be appreciated.

Thankyou.

Your friend needs a loan in his name alone for the total mortgage + your share of the equity that he'll pay you.

e.g. current house value 100k with a 80k mortgage outstanding. Assuming you've split everything down the middle, your equity share is 10k. So, friend would need a sole mortgage for 90k, and use the funds to pay off the current mortgage and pay 10k cash to you.

You can engage a solicitor to handle the transfer of deeds. If friend uses a different lender they will want to survey & have conveyancing checks done on the property.

Also beware of some taxes & costs
* CGT for you if you haven't lived in the property the entire time you've owned it.
* Stamp duty for friend on the consideration he pays for your share of the property. SDLT is payable on your half of the mortgage he's taking over (ie 40k in the example) plus on any money he pays for your equity (ie 10k in the example)
* Solicitors costs,
* Land registry fees
* New mortgage application fees, valuations, surveys, conveyancing
* Removals costs

Decide now before these costs are incurred who will pay for these.