My partner and I own a home as joint tenants with right of survivorship. We are not married but are now breaking up. I want to be bought out of the house but I also don't want him to lose it by having to sell. I know he can borrow the money to pay me my half of the equity, but how can I also remove myself from the mortgage and deed? He would most likely borrow the money from his family if that is a factor.
I am not licensed in Virginia, so this response will be generic by necessity - be sure to consult with a good local real estate attorney to be sure.
That said, o accomplish what you wish, you would both have to execute a deed into him; and he would likely have to refinance and get a new mortgage in his name only (as the odds are pretty good the mortgagee will NOT let you off" the mortgage until it is paid in full). In addition, the transfer, when recorded, could very well trigger a "due on sale" clause making the entire loan amount due.
As I said, you will need to consult with a good local real estate attorney to accomplish all of this, or perhaps find other options.
Hope this helps.
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Your ability to remove yourself from the mortgage depends entirely on whether the mortgage company wants to release you, and whether the other party qualifies in your absence. Seek out a local attorney for more information.
This post is not intended to create an attorney-client relationship, nor should the information contained therein be considered as legal advice. Each case is unique, and posters should seek independent counsel to handle their legal problems. This post is merely intended to be educational in nature. I am not your attorney, nor do I agree to appear in court for you by posting this information.
There are three separate issues: (1) ownership (2) liability on the mortgage and (3) whether selling to your partner triggers 'due on sale' in the mortgage.
(1) is a no brainer. Agree on a price, sign a deed to your partner and you no longer have ownership.
(2) is also fairly clear - as long as the mortgage is unpaid, you're liable, it shows up on your credit, AND it could affect your ability to get another mortgage should you buy another home. See discussion (3) below.
(3) is the most difficult and unclear. The deed of trust (what most people call a mortgage) securing the loan on the home has a clause that if the property is sold the lender can demand payoff. The lender made its deal with you and your partner as borrowers, not anyone else. The question is whether one partner selling their interest to the other triggers 'due on sale'. In a typical husband and wife situation it usually doesn't, and something called the Garn-StGermain act prohibits that in case of death. But does that work for you? I don't think anyone knows. It depends on the lender/servicer of the loan. In our super-centralized economy you probably can't get an answer because mortgage lender/servicers are both stupid and chicken (which is also why you cannot get off liability for the mortgage in (2).
The best solution, if possible, is for your partner can refinance the entire thing into their name alone, It may be worth you reducing your share of the equity by a few thousand (such as helping with 'points') to help it happen. Best advice - stay civil and both of you be flexible to get past this.
Answers provided are general in nature and usually based on Virginia law. If I answer something posted from another state I'm probably out on a limb. Reliance on any answer posted here is at the sole risk and responsibility of the user, and in no way creates or implies an attorney client relationship with the author, his firm, staff, family or even his dog. And isn't it silly that we have to cover our *(&%$ with disclaimers in case some fool wants to blame me when they screw up? Reading any answer means you agree with the above.
Once you agree upon a value for your share of the equity, and your partner cannot pay cash, you can have your partner sign a note secured by a second deed of trust filed against the property. You should only pursue this option if it is clear that your partner can pay the mortgage without your help, and also make the monthly payments to you. As stated before, the best option would be for your partner to refinance, with the loan amount high enough to pay off the existing mortgage and pay you your share of the equity. Consult with a local attorney for more information.
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