How do I take my name off a joint mortgage with my son?

22 July 2016

Q

I bought my council house with my son using the Right to Buy scheme. My contribution to the purchase was the discount under Right to Buy plus the deposit. My son is paying the mortgage, but it is in both our names.

I have now inherited money from my parents and want to buy a property for myself. How do I get out of the joint mortgage with my son, so I don’t become liable for second-home stamp duty? Is it a simple procedure or will my son have to remortgage?

From
BA/London

A

As you say, if you are planning to buy another property it would incur the 3% surcharge on stamp duty rates that now applies to additional properties. Essentially, it sounds as if you want your son to buy you out of the property so that it is in his name only. That isn’t as straightforward as it might initially sound and it’s not possible to simply take your name off the mortgage and property title. The mortgage lender will need to be able to see that your son can afford the mortgage on his own income.

Presumably, your son will also need to raise funds in order to buy you out. That may mean additional borrowing from the current lender or remortgaging. There will also be some legal work required in order to make the transfer of ownership.

 

Finally, as the property was purchased under the Right to Buy scheme you need to check if there are any conditions preventing you selling. In most cases, there will be a pre-emption period of five years during which time some, or all, of the discount would be repayable if the property is sold.