A reader from Essex wants to know if her boyfriend can sell his half of a property with his ex to her granddad for cash.
Drawing on years of experience, mortgage adviser Katie Tucker – of mortgage broker Mortgageforce – tackles the problem.
Claire from Essex asks:
My boyfriend wants to sell his half of the mortgage he has with his ex to her granddad for cash.
How long should this take and what would he need to do in order to get his name off the mortgage?
Are there any legal implications if her granddad is paying cash?
What happens here is that a solicitor takes him off the property deeds, and adds Granddad instead, and that is the sale to granddad.
Meanwhile, the ex-girlfriend has to get a mortgage offer, which has her and granddad on it. (depending on his age she might struggle with this so a broker will need to find a lender with a high age limit).
The new mortgage needs her and granddad on it as a mortgage liability has to have ALL the same people as the property deeds – so that the lender has full rights to repossess.
I would suggest that perhaps it would be easier if granddad does not want to be named on the property, in which case he does not have to be named on the new mortgage.
He could make a private arrangement on paper with his granddaughter after the sale.
Ex-girlfriend just gets her own little mortgage in just her name, the property deeds are written into just her name, and the new little mortgage combined with granddad’s cash pays off the old mortgage, leaving your boyfriend free.
If there is any change after the half the mortgage is paid off with the cash, then that is what your boyfriend walks away with.
It will be half of whatever equity they have worked up over the years they have had the property together.
Time wise expect 4 weeks for the mortgage, and 2 more weeks for the solicitor to change the property deeds and transfer funds.
If you have a question for Katie, go to the myfinances.co.uk Ask the Mortgage Expert section.
For more information on the issues discussed here, go to www.mortgageforce.co.uk.
Mortgage Force Ltd is authorised and regulated by the Financial Services Authority, and is entered on the FSA register (www.fsa.gov.uk/register) under reference 301046.
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