For a joint ownership to become the full property of one of the co-owners only, the latter must buy back the other co-owners. This is called a redemption of cash. Banks finance this kind of operation via a mortgage.
What is a redemption of cash?
In a succession or divorce, the balance is the amount claimed from the future owner to compensate for the difference in value between the goods. The redemption of a rebate consists in buying back the shares of a property bought in common with the person or persons with whom the purchase was made, provided of course that there are sufficient financial resources.
Funding for a cash payment can be made through a personal contribution or credit. The conditions offered by the banks are the same as for a conventional home loan. However, the current loan must be repurchased before another, which often leads to early repayment penalties. The operation also involves a mandatory passage at the notary, with associated fees.
Put all the chances on your side to obtain a loan for the purchase of balance
A money back buy-back will be studied as a traditional home loan file. The bank will look at the borrower’s employment contract, his income, the account keeping, the debt ratio, the rest to live, the jump of load, the capacity of saving and the estimate of the value of the good immovable. Important : the alimony will be considered as additional income for the person who perceives it and as a charge for the one who pays it. In both cases, it will be necessary to wait until the amount is fixed for the lender to study the file.
Take the case of a married couple under the community of property regime. If one of the spouses wishes to keep and acquire the common dwelling while a mortgage is in progress, he will have to pay a balance to his ex-spouse. The credit rate and insurance offered will be the same as those proposed in the context of a real estate acquisition.
Example: Mr and Mrs own joint ownership of a house purchased for € 200,000. The financing of this property is subject to a credit of an initial amount of € 170,000. When the divorce is pronounced, it remains 100 000 € to repay. The house is estimated by a notary to 240 000 €.
If Mr decides to stay in the house, he will have to pay his ex-spouse the sum of 70 000 €.
Calculation: 240 000 (value of the good) – 100 000 (amount of the credit remaining) = 140 000/2 is 70 000 euros.
Mr will also have to buy back the remaining mortgage for an amount of € 100,000. Mr must therefore invest 170,000 euros to keep the property, not to mention the additional costs.