How to Get Out of Joint Ownership
An Unwanted Situation
As a single mom, you bought a house with your son about a decade ago. You used both incomes to qualify for the mortgage and split the costs. A few years later, your son began a relationship, and his significant other moved in. Eventually, you met someone, and you want to buy a house. The problem is that you can’t qualify for a loan because you have the existing mortgage on your credit. Your son wants to stay put, and you’re not sure what to do.
Options for Resolution
You have options, and you have several things in your favor. First, it seems everyone is getting along and trying to work through this together. The legal system does have solutions for this quandary if you and your family cannot work through this. However, like most legal disputes, it would be expensive and time-consuming and is best avoided if possible.
That said, you will both have to make some compromises. Over the last decade, the value of your house has increased significantly. This equity means that your son can refinance the loan, perhaps with his significant other, and use some of the equity to buy you out. This would free up your credit and help you with the down payment on your new home.
Refinancing and Buying Out
The downside is that the new loan will have a higher interest rate, making the monthly payments higher for your son. Additionally, they will have to carry the housing expenses without your help. If your son’s income cannot support the existing house even with the help of his significant other, the other option will be to sell the existing home and split the equity. He should be able to use the funds he receives towards a more affordable home, and you can do the same with your new love.
Partition Lawsuit as a Last Resort
When a property has multiple owners and one wants out, that person can go to court and force the other to buy them out or have the property sold in a “partition” lawsuit. Since selling the property or buying you out is inevitable, it is better to get it done yourselves, saving the distress and expense of a lawsuit just to end in the same place.
Conclusion
In conclusion, getting out of joint ownership can be a challenging and complex process. It requires compromise and communication between all parties involved. By understanding your options and the potential outcomes, you can work towards a resolution that suits everyone’s needs. Remember to seek professional advice from a real estate lawyer to ensure a smooth and successful transition.
FAQs
* What are my options for getting out of joint ownership?
+ You can consider refinancing the loan and using some of the equity to buy you out, or selling the property and splitting the equity.
* What are the disadvantages of refinancing and buying out?
+ The new loan will have a higher interest rate, making the monthly payments higher for your son, and they will have to carry the housing expenses without your help.
* What is a partition lawsuit?
+ A partition lawsuit is a legal process where one party can force the other to buy them out or have the property sold.
* How can I get out of joint ownership without going to court?
+ You can work with your son to come to a mutually agreeable solution, such as refinancing and buying you out, or selling the property and splitting the equity.
