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Saturday 4 January 2025
Saturday 4 January 2025
Saturday 4 January 2025
Saturday 4 January 2025
If you need to buy out an ex-partner or co-owner but can't afford it alone, we can help. With the right mortgage options, you could take full ownership and stay in the home you love.
Why You Might Need to Buy Out a Co-Owner
There are several common situations where buying out a co-owner may be necessary:
Separation or Divorce
When a relationship ends, one party may wish to remain in the home, requiring them to refinance the mortgage to remove the other party.
Guarantor Mortgages
If a family member, such as a parent or sibling, helped you get onto the property ladder through a guarantor-type mortgage, you may now need to remortgage to remove their name.
Family Income Boost Mortgages
Some buyers have used a family member's income to qualify for a mortgage. Eventually, the co-owner may need to be removed so they can buy their own home without their name being tied to the original mortgage.
Inherited Properties
If you have inherited a property jointly with other beneficiaries and wish to retain full ownership, you may need to remortgage to buy out the other beneficiaries. This allows you to keep the property while compensating others for their share.
Government Schemes (Shared Ownership & Help to Buy)
If you purchased your property using a Help to Buy or Shared Ownership scheme, you may wish to buy out all or part of the government’s stake through a process known as staircasing. This often requires a remortgage to raise the necessary funds.
Additionally, many of these schemes require a separate valuation by an independent surveyor to determine the government’s share, and this cost would usually be the responsibility of the homeowner.
Challenges of Buying Out a Co-Owner
1. Timing the Remortgage Correctly
Getting the timing right when refinancing to buy out a co-owner is crucial. Your current mortgage may have early repayment charges, or if probate has not yet been granted on an inherited property, there could be delays.
We will discuss your situation with you in detail to ensure that the timing of any remortgage or Transfer of Equity works in your favour and helps you avoid unnecessary costs. This is particularly important when refinancing under government-backed schemes, where additional surveys and valuations may be required.
2. Affordability on a Single Income
Lenders will reassess your financial situation to determine whether you can afford the mortgage on your own. Depending on your income and financial commitments, this can sometimes be a challenge.
3. Lender Policies on Removing a Party
Some lenders allow you to remove someone from a mortgage and the title deeds through an affordability assessment, but not all do. If your current lender does not support this, a remortgage with a new lender may be necessary.
4. Transfer of Equity and Legal Costs
Removing a co-owner requires a legal process known as a Transfer of Equity, which must be handled by a solicitor. This is one reason why removing or adding a party is often done at the same time as a remortgage, as it simplifies the process.
Many remortgage products offer free legal services, but these usually cover only a standard remortgage.
A Transfer of Equity incurs an additional legal fee.
If the transfer is deemed complex, it may be best to use an independent solicitor rather than the lender’s free legal service, ensuring a smoother process.
Inherited Properties, Government Schemes, and Mortgage Buyouts
A similar transaction to buying out a co-owner occurs when a property is inherited.
If a property is inherited and still has an outstanding mortgage, the beneficiary may need to refinance to pay off the existing mortgage rather than selling the property.
If multiple beneficiaries inherit a property, but only one wants to keep it, they may need to remortgage to buy out the others.
Different lenders may treat this as either a purchase or a remortgage, depending on how the property is currently owned and whether there is an existing mortgage.
Regardless of the situation, we can assess the best options available and provide expert guidance.
For those involved in government-backed schemes like Help to Buy or Shared Ownership, the buyout process follows a similar approach. However, an additional step is required: a valuation from an independent surveyor to determine the outstanding share to be repaid. This cost is typically covered by the homeowner, and using a suitably qualified surveyor is essential.
How We Can Help
At Barrett Mortgages, we understand that buying out a co-owner can be a complex and emotional process. We will:
Assess your affordability and guide you through your mortgage options.
Compare lenders to find the best solution for your circumstances.
Work with solicitors to ensure a smooth Transfer of Equity.
If you need to remortgage to remove a co-owner or exit a government-backed scheme, or have any questions about your mortgage options, get in touch with us today. We’re here to help you stay in the home you love while making the process as simple as possible.
If you need to buy out an ex-partner or co-owner but can't afford it alone, we can help. With the right mortgage options, you could take full ownership and stay in the home you love.
Why You Might Need to Buy Out a Co-Owner
There are several common situations where buying out a co-owner may be necessary:
Separation or Divorce
When a relationship ends, one party may wish to remain in the home, requiring them to refinance the mortgage to remove the other party.
Guarantor Mortgages
If a family member, such as a parent or sibling, helped you get onto the property ladder through a guarantor-type mortgage, you may now need to remortgage to remove their name.
Family Income Boost Mortgages
Some buyers have used a family member's income to qualify for a mortgage. Eventually, the co-owner may need to be removed so they can buy their own home without their name being tied to the original mortgage.
Inherited Properties
If you have inherited a property jointly with other beneficiaries and wish to retain full ownership, you may need to remortgage to buy out the other beneficiaries. This allows you to keep the property while compensating others for their share.
Government Schemes (Shared Ownership & Help to Buy)
If you purchased your property using a Help to Buy or Shared Ownership scheme, you may wish to buy out all or part of the government’s stake through a process known as staircasing. This often requires a remortgage to raise the necessary funds.
Additionally, many of these schemes require a separate valuation by an independent surveyor to determine the government’s share, and this cost would usually be the responsibility of the homeowner.
Challenges of Buying Out a Co-Owner
1. Timing the Remortgage Correctly
Getting the timing right when refinancing to buy out a co-owner is crucial. Your current mortgage may have early repayment charges, or if probate has not yet been granted on an inherited property, there could be delays.
We will discuss your situation with you in detail to ensure that the timing of any remortgage or Transfer of Equity works in your favour and helps you avoid unnecessary costs. This is particularly important when refinancing under government-backed schemes, where additional surveys and valuations may be required.
2. Affordability on a Single Income
Lenders will reassess your financial situation to determine whether you can afford the mortgage on your own. Depending on your income and financial commitments, this can sometimes be a challenge.
3. Lender Policies on Removing a Party
Some lenders allow you to remove someone from a mortgage and the title deeds through an affordability assessment, but not all do. If your current lender does not support this, a remortgage with a new lender may be necessary.
4. Transfer of Equity and Legal Costs
Removing a co-owner requires a legal process known as a Transfer of Equity, which must be handled by a solicitor. This is one reason why removing or adding a party is often done at the same time as a remortgage, as it simplifies the process.
Many remortgage products offer free legal services, but these usually cover only a standard remortgage.
A Transfer of Equity incurs an additional legal fee.
If the transfer is deemed complex, it may be best to use an independent solicitor rather than the lender’s free legal service, ensuring a smoother process.
Inherited Properties, Government Schemes, and Mortgage Buyouts
A similar transaction to buying out a co-owner occurs when a property is inherited.
If a property is inherited and still has an outstanding mortgage, the beneficiary may need to refinance to pay off the existing mortgage rather than selling the property.
If multiple beneficiaries inherit a property, but only one wants to keep it, they may need to remortgage to buy out the others.
Different lenders may treat this as either a purchase or a remortgage, depending on how the property is currently owned and whether there is an existing mortgage.
Regardless of the situation, we can assess the best options available and provide expert guidance.
For those involved in government-backed schemes like Help to Buy or Shared Ownership, the buyout process follows a similar approach. However, an additional step is required: a valuation from an independent surveyor to determine the outstanding share to be repaid. This cost is typically covered by the homeowner, and using a suitably qualified surveyor is essential.
How We Can Help
At Barrett Mortgages, we understand that buying out a co-owner can be a complex and emotional process. We will:
Assess your affordability and guide you through your mortgage options.
Compare lenders to find the best solution for your circumstances.
Work with solicitors to ensure a smooth Transfer of Equity.
If you need to remortgage to remove a co-owner or exit a government-backed scheme, or have any questions about your mortgage options, get in touch with us today. We’re here to help you stay in the home you love while making the process as simple as possible.
