Removing and adding a name to a mortgage and various other?
Right, years ago when in university my partner and I wanted to buy a house. As I was in university there was very little hope of me getting anything.
So, my girlfriends dad remortgaged his house for a 20k deposit and took out a mortgage with her on this house. He had no financial input as we paid the mortgage and paid him back a monthly sum on the 20k.
Now he wants to downsize (100k to 70-75k) and is falling short on funds and transferring remaining mortgage (40k, 20
of which is ours).
So, firstly we need to remove him from this mortgage and place me on. How easy is this? Secondly we need to raise around 15k to repay him before it gets a bit awkward.
The house is around 80k with 50k outstanding on mortgage.
So, how easy or realistic is this going to be? We both pull in around 27k per year. Not perfect credit scores.
I'm assuming loan to value is probably around 80% so the likelihood is we won't raise the full amount through remortgage.
Anyone see any glaringly obvious problems with this or been in a similar situation or indeed have a reasonable plan of action or some advice.
- linkus86Lv 76 years ago
Assuming you already paid back that $20k loan to Dad, I am scratching my head why he expects another $15k from you or why he needs it in the first place. Once you refinance the house in only your names, and get his name off the mortgage it will free up a lot of his own credit allowing him to finance more than he presently can. And if you do have to pay Dad more, you should be able to refinance and up to 79% loan to value to get an additional $13k of your equity out of the house if you valuations are true.
But after reading your question again, I have to assume Dad plans to keep his $100k house and buy another $75k house too. Because if he only needs to resolve the debt of the existing mortgage, he can easily do so by selling his present house for $100k, paying off the bank with $40k and getting a new mortgage on the new house. If Dad can't get that small of a loan, have him get one larger and then pay it off quicker with the $60k he will have in the bank or wait until he has that extra $15k saved up.
- real estate guyLv 76 years ago
it sounds like you DID NOT pay your him back. You owe him 15,000!
You can't just add and delete names from a mortgage. The ONLY! way to do what you want to do is refinance this home in your name (and GF). This will remove him from the loan.
However, you may be able to pull the 15k out at the refinance and pay him off.
- Geoff BLv 76 years ago
You need to remortgage it in your name and your partners for 67k to allow for admin costs