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Selling 50% of house

Hi

I have a house valued at around 380k that I 50% own with my sister we have around 180k to pay of the mortgage. I am looking to sell my share of the property and my sister might have a buyer for my share. I was wondering what is a fair price I could ask for it. I was thinking around 100k as then the buyer could take on my 90k share of the mortgage and would effectively have a 50% share for around 190k.

Would this be fair for all parties involved or am I overvaluing my potential share? Im just trying to wrap my head around it all.

Thank you! 

Comments

  • theoretica
    theoretica Posts: 12,691 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    You can't just pass a mortgage over.  You would need to sell your half for 190k (or whatever, maybe a bit less as you won't have estate agent fees or hassle) and you and your sister pay off the mortgage (with your sister and the new person taking out whatever mortgage they need to do this).  You need to be sure that your name can be entirely taken off the mortgage.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
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  • lincroft1710
    lincroft1710 Posts: 19,072 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Very difficult to value.  Except in divorce settlements, unless it is extremely advantageous for the purchaser to own a 50% share, the cost to buy that 50% share is usually less than 50% of the value of the whole property
    If you are querying your Council Tax band would you please state whether you are in England, Scotland or Wales
  • eddddy
    eddddy Posts: 18,161 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 16 October 2024 at 2:56PM

    You can't transfer a mortgage to somebody else.


    It sounds like your current situation is something like this:
    • You and your sister jointly own a property worth £380k
    • You and your sister have a joint mortgage of £180k

    So...
    • Your sister and 'the new person' will need to apply for a new joint mortgage for £180k
    • You and your sister will need to pay off your current joint mortgage of £180k (presumably you'll pay £90k each)
    • You'll sell your 50% for £190k (or whatever) - of which £90k will go towards paying off the current mortgage


  • Caz3121
    Caz3121 Posts: 15,860 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    does the potential buyer have £100k in cash or would they be needing a mortgage for that too...then your sister will end up being party to a mortgage bigger than £180k.
    Not sure the relationship of this person but is your sister happy to be financially tied to them for x years...what if they want to sell? what if she wants to sell?
  • Exodi
    Exodi Posts: 4,186 Forumite
    Eighth Anniversary 1,000 Posts Wedding Day Wonder Name Dropper
    edited 16 October 2024 at 4:43PM
    You can't just pass a mortgage over.  You would need to sell your half for 190k (or whatever, maybe a bit less as you won't have estate agent fees or hassle) and you and your sister pay off the mortgage (with your sister and the new person taking out whatever mortgage they need to do this).  You need to be sure that your name can be entirely taken off the mortgage.
    eddddy said:

    You can't transfer a mortgage to somebody else.


    It sounds like your current situation is something like this:
    • You and your sister jointly own a property worth £380k
    • You and your sister have a joint mortgage of £180k

    So...
    • Your sister and 'the new person' will need to apply for a new joint mortgage for £180k
    • You and your sister will need to pay off your current joint mortgage of £180k (presumably you'll pay £90k each)
    • You'll sell your 50% for £190k (or whatever) - of which £90k will go towards paying off the current mortgage
    Sorry but I disagree with both of these comments. It is entirely possible (and not even particularly uncommon) to transfer a mortgage to another person and there is no requirement to pay off the current mortgage. Most lenders will allow a change of parties (for a fee, of course) assuming the lender is agreeable and the new parties are willing and meet affordability. The additional lending to buy out the OP could be secured through a 'further advance' which effectively acts as a second mortgage.

    The process can be done pretty easily with a convenyancer guiding them through a transfer of equity process and submitting a TR1 (though I believe practically the sister should instruct the conveyancer).

    The biggest challenge will be for the sister, because she will be jointly named on the original £180k mortgage and also on the new £100k further advance, so £280k she's now joint and severally liable for with the other party. She will want to protect her original equity, which likely means owning as tenants in common with a deed of trust ring-fencing her current £100k equity.

    Personally I think the OP may need to take a bit of a hit on the equity, as the situation doesn't sound ideal for the sister (unless it's her idea, or a long term partner moving in, or something), plus depending on who's idea this is, they may want to cover the legal costs which could be around grand or so.
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