Financing in Millsboro>Question Details

Elise, Home Buyer in Mount Laurel, NJ

A friend of mine and I own a home. The mortgage balance is $85,000.

Asked by Elise, Mount Laurel, NJ Thu Jun 21, 2012

He and his girl want to buy me out. The home is valued at $170,000 and I'll take 60k to get out which the other party will pay me.
What are the logistics then for the two of them. Will the mortgage remain at 85k and what will be monthly payments based on mortgage rates.

Help the community by answering this question:


If your name is on the mortgage and deed, the only way to get your name off these documents is to have an attorney handle the transaction for you. This is much more complicated than selling a used car because it involves real estate law and dealing with the mortgage company. Like heart surgery, don't try this on your own! You could end up in a real legal and financial mess.

The best bet is to have your friend and his girl apply for a new mortgage. At settlement (conducted by a real estate attorney), you will receive your share of the money. A new mortgage and a new deed are issued in their names, and you no longer have financial or legal responsibility for the property.

If you are thinking of taking the $60,000 and having your friends "take over payments", you are thinking of a transaction called an "assumption". This was done years ago rather frequently, but no more. Read your mortgage documents carefully. Unless your current mortgage is over 20 years old, you will find language prohibiting assumptions and you will find your initials or signature on the page.

Be smart. Get your money and get your name off the deed and mortgage!
0 votes Thank Flag Link Fri Jun 22, 2012
If you are being bought out, the mortgage that is on the property becomes due (if your name is on it).
They would need to consult with a mortgage officer since they need the $60,000 to buy you out. They could get a FHA mortgage to pay off the current mortgage and to pay you. The mortgage officer could see if they qualify for the mortgage.
0 votes Thank Flag Link Thu Jun 21, 2012
First, You want to sell this to them and remove yourself from the current mortgage and deed so you are no longer responsible for either the loan or property. Find out the interest rate of the current loan and terms. If they are good, talk to the lender of this mortgage and find out if it is assumable by the new interested parties. If it is not assumable, the rates are still at an all time low. The other two parties need to qualify on their own. If you want $60K and you owe $85K, that makes the price at least $145K. What the payments are depend upon what they finance together and that will be based on cash available, loan type and closing costs. Hope this helps and Good Luck!
0 votes Thank Flag Link Thu Jun 21, 2012
Come again?
The only way that the mortgage can remain at $85 is if they pay you cash for your interest, or , they take out a 2nd to pay you off.

If they refinance, they will owe $85 + $60 = $145

The rates will be whatever they can qualify for.
Their monthly payments will be whatever they can negotiate.
I'm not used to the Seller negotiating for the Buyers.
0 votes Thank Flag Link Thu Jun 21, 2012
Unless you refinance the mortgage will not be affected - no changes. A better question is will you still be on the mortgage and I am betting you will. If you remove your name from the deed but stay on the mortgage you will be doing a not so smart thing. Will the bank allow you to remove your name from the mortgage, I doubt it unless you refinance in the other peoples names and if they can qualify. You need to find out a lot of things and need a lawyer guiding you on this, it won't be as easy as you are thinking.
0 votes Thank Flag Link Thu Jun 21, 2012
Dear Elise,

If you move forward with this transaction you want to make sure that your name is off the mortgage.

Chris Kavanagh
Coldwell Banker Residential Brokerage
Bethany Beach, DE 19930
0 votes Thank Flag Link Thu Jun 21, 2012
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