• Remortgage To Buy Out My Brother From Joint Mortgage

    By Guest on 19th Jul 2016

    I currently have a joint mortgage with my brother. He has said he wants me to either buy him out or we sell. Myself and my boyfriend have taken out a remortgage to pay of the existing mortgage and give him his share of the equity. There was £8000 left from the original mortgage. We had half of the money each. I have been told that his half of the equity should be reduced by the share of the money he has had from the mortgage. This is because we are paying the original mortgage off and I will be paying my share back that way. My brother does not agree as he thinks it should come out of the settlement of the house? Surely there is no settlement if it is a remortgage as the house isn't for sale? I don't see that it is fair that we pay a mortgage for 22 years for him to have £4000 for free in theory. Am I correct in thinking it is a remortgage as I already own 50% of the property?

  • 4 Answers

    By Guest on 21/07/2016

    The law doesn't say anything about who pays what in this situation. Each party is free to negotiate a price share being transferred. As for what is morally fair, I would need a bit more detail What is the value of the property? How much did each of you contribute toward the purchase? Who has been paying the mortgage payments?

  • By Guest on 21/07/2016

    The house has been valued at £160,000. It was my fathers house. We took out a joint mortgage to pay off his interest only mortgage. We did not put any money in. My father signed the equity over to us as a gift of purchase. We have been paying the mortgage equally. We only took the mortgage out last June. This is why I do not think it is right that he would be able to walk away with his full share of the equity when we have paid equal payments and myself and my boyfriend will be paying back for over 22 years for him to have money for nothing in theory.
    My father passed away in April this year.
    The original mortgage was for £100,000. I have told him, on the advice given from my mortgage broker that he would receive his half of the equity, less half of the early repayment charge on the original mortgage ( I have been told by the mortgage company that he is liable to pay half of this which would be £2000) , less the £4000 which he has already spent. He will receive £24000
    Thank you for your help on this matter. It is very much appreciated.

  • By Guest on 25/07/2016

    I think there might be a typo in your figures somewhere - you mention an outstanding mortgage balance of £8,000 but say you took out a mortgage for £100,000 last year - was the original mortgage £10,000? Either way, in this situation you would expect to see your brother's share of the equity calculated in the same way as if the property were sold, i.e. from the sale price (or in your case from the value of the property) deduct the outstanding mortgage debt, the costs associated with the sale (or your case the costs associated with the transfer but not any fees you have had to pay in respect of your new mortgage) and then split whatever is left in accordance with the percentage share each party owns. In your case, 50/50. Given then you have been paying the mortgage (and presumably any other costs) jointly this would to my mind seem fair

  • By Guest on 25/07/2016

    Thanks for your reply. The £8000 was money that was left over from the mortgage that was meant to be for home improvements. This is why am I looking for advice as we have both had £4000 each. I thought as my partner and I are repaying the original mortgage back through a remortgage I would in theory be paying my share back. Just does not seem fair that if he receives his full 50% of the equity, we are paying over 22 years for him to receive another £4000.

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