Getting Out of Joint mortgage
bclbcl
Posts: 11 Forumite
I am currently on a joint mortgage with my parents and planning to buy a new property for myself.
Assuming I leave the joint mortgage and the property I want to buy is 200k how much stamp duty would I be paying? Also will do I have to pay 25 percent deposit or will 10 percent be enough? Can someone please advise me on this?
Note: If I leave the joint mortgage it means I will have to move out into temporary accommodation until I buy a new property for myself. I am planning to rent out for 6 months hopefully by then I will have a new property to move into.
Assuming I leave the joint mortgage and the property I want to buy is 200k how much stamp duty would I be paying? Also will do I have to pay 25 percent deposit or will 10 percent be enough? Can someone please advise me on this?
Note: If I leave the joint mortgage it means I will have to move out into temporary accommodation until I buy a new property for myself. I am planning to rent out for 6 months hopefully by then I will have a new property to move into.
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Comments
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The only way to "get out of" any mortgage is to have another person/persons mortgage for the full amount.
e.g. if the current mortgage is £210k between 3 of you, the other two would need to have the ability to raise £210k on a mortgage without you.
They can't just "take over your bit" on the back of a letter or signature. Their affordability would need to be checked.
What are the chances?
And why would you need to move out if you weren't a part-owner any more? Couldn't you just pay them rent?0 -
Hi, thanks for the quickly reply. I can confirm if i move out my parents will be to cover the remaining mortgage and pass affordability without any problem. Legally you are not allowed to stay at the same property if you get out of a joint mortgage. Hence the reason i will have to find temporary accommodation until i buy a new property.0
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What I am not sure is how will a lender view me if leave a joint mortgage and want get a new property for my self to live in?
Is 10percent deposit enough or will i need 25 percent?
How much Stamp duty will I pay on 200k? Will it be £1,500 or £7,5000 -
Hi, thanks for the quickly reply. I can confirm if i move out my parents will be to cover the remaining mortgage and pass affordability without any problem. Legally you are not allowed to stay at the same property if you get out of a joint mortgage. Hence the reason i will have to find temporary accommodation until i buy a new property.
You either work for the lender and have ran a new application or the lender has already given your parents a DIP for the new mortgage - if that is the case then happy days.
The lender can make any sort of stipulations they like about leaving the property if your coming off the joint mortgage - but it doesnt make it Law. You can just push the button on the new mortgage when you find a place to buy - so you wont need to be in temporary accommodation.0 -
What I am not sure is how will a lender view me if leave a joint mortgage and want get a new property for my self to live in?
Is 10percent deposit enough or will i need 25 percent?
How much Stamp duty will I pay on 200k? Will it be £1,500 or £7,500
You need to consult the lender or broker to find out if 10% is enough - have you ran some numbers through any online affordability calculators?
If you come off the first property at the same time as buying the new one then you wont need to pay the higher stamp duty if you cant complete on the same day then you may have to pay the higher amount and reclaim it back once your off the first property - speak to your solicitor about that.0 -
Hi, thanks for the quickly reply. I can confirm if i move out my parents will be to cover the remaining mortgage and pass affordability without any problem. Legally you are not allowed to stay at the same property if you get out of a joint mortgage. Hence the reason i will have to find temporary accommodation until i buy a new property.
Really? What law says that?0 -
There is no reason for you to move out if they pass a new affordability test because you are their progeny. Children don't have to move out of porperties their parents own and live in.Shampoo? No thanks, I'll have real poo...0
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A lender will typically not sanction a transfer of equity unless the leaving party will vacate the property on the date the transfer takes place.
OP - if you own no other property on the date the completion of the new purchase takes place, you will pay standard stamp duty, no surcharge.
The amount of deposit will depend on your chosen lender and its criteria. Why would you expect a 25% deposit?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thanks you all for the replies
Just to confirm i will first be leaving the joint mortgage and only after all the legal process are complete i will buy a new property.
I was advised by the lender if I were to leave the joint mortgage i will have to leave the property. But I will call and confirm again.0 -
Hi, I assumed 25% as i am no longer a first time buyer but I will only buy a new property once i leave the joint mortgage completely. I wasn't sure.0
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