Buying out someone else ??

C

col_hanley

Guest
Hi, my girlfriend owns a house with a friend of hers. Her friend has decided to sell her share of the house (50%) and I am thinking about buying it off her. They originally paid 220,000 but now the house is worth 250,000. Does anyone know what would be involved in my buying her half of the house ? Would I have to give her 15,000 + whatever she has paid off mortgage so far and merely replace her on the shared mortgage account ?
 
I would think the obvious thing is you pay half the going rate for the house and the seller sorts her/his own debt out with the bank, so in short you pay 125,000 plus legal fees to her/him. She pays the remainder of the mortgage to the bank and you start a new mortgage for 125k.
 
If your girlfriend and her friend have a shared mortgage account, you and your girlfriend will now have to get a new mortgage, buy out her friend and repay the old mortgage.
 
Just to be clear - there are no fixed rules about how to buy out the other party in these circumstances. So like all buy/sell transactions, you'll have to find a solution that is agreeable to both parties. It's a question of how much it will take to keep her happy.

There may be a lesson learnt for other readers on the importance of getting an in place beforehand when buying with a friend.
 
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