In Deed or Not!

[Starsky]

Myself and a friend purchased a house a number of years ago and now my friend and her boyfriend have put down a deposit on a new build which wont be ready for approx 6 months so she will be moving out and I will be buying her out of the property.

I want to get my finances sorted out now as my boyfriend will be moving city to come live with me in this house over the next few months.

When we purchased the house I paid for the deposit in full as I was on a very good salary and had sufficient savings. At the time my friend was on a low income and had no savings. So I purchased 10% of the property and we shared the 90% mortgage 50/50.

Over the past few years I retrained and set up in business so my financial situation is not as it used to be and I do not have 3 years accounts yet. It will be in 2007 before I can get them and it is this year that the business is showing a profit. So I cant actually go for a mortage yet.

I will owe my friend in the region of €60/70k when the house is valued and I will have that amount of cash to give her in a couple of months (with the help of parents and an SSIA)

So my thoughts are to give my friend her share of the equity and then in about 6 or so months time apply for a mortgage and take the outstanding one as is. My friend will be paying rent and not a mortgage when she receives her cash.

My question is and one that concerns my parents - can I arrange to have my friends name taken off the deeds when I pay her the the cash, with her concent, even though her name is still on the mortgage or will the current mortgage company object to this?

Thank you in advance for any help

 

[Vanilla]

Normally what happens in these situations is that you get a new mortgage, pay off the old mortgage and have the transfer executed by your friend into your sole name. This is because the current mortgage company has to join in the deed to transfer the property into your sole name unless they have been repaid in full.

If there is no stamp duty payable on the deed you could have her execute the documents and leave them unregistered until you are in a position to get the new mortgage -talk to your solicitor about this.

Are you sure you would not be able to obtain a mortgage? Even without three years accounts some banks might well still offer you one. Check and see first anyway.

 

[liteweight]

Have you approached your current mortgage lender?

 

[Starsky]

Thanks guys. I have approached a Bank and asked them about that. They said that 2yrs and 9 months accts should be fine as it does not strictly have to be the full 3 years and on the basis of lasts years accounts and on what gross income has been achieved this year so far that there is no reason why I would not be able to get a mortgage.

So that has given me great peace of mind and I have asked my accountant now to prepared my accounts to date and then I will go "shopping" for a mortgage.