How a buy out of a mortgage works.

My boyfriend I jointly have a mortgage. He is trying to refinance to remove my
name from the mortgage at my request. I put down more than half of the money for
the down payment of the house, how do I go about getting my down payment money
back? Do I need to buy him out of the mortgage?

House appraised for 227,000 – currently still owe 217,000.

Thank you,
Marissa

Asked on January 9, 2018 under Real Estate Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

This is up to you and him to negotiate: there is no set or required formula or structure for this. Whatever you and he work out is legal and--assuming you put it into writing--will be enforceable. 
Bear in mind that if you lived there, you gained the benefit of living there, and people pay rent to reside some place. If there is only $10k in equity ($227k - $217k), the down payment is presumably $10k or less. If you paid more than half, your share might be $5k or $6k. If that is even approximately correct, if you lived there for even 6 months, your share of the down payment would out to paying the equivalent of $1k or less per month (how much less depends on how many months you lived there) for use of a home. It may not be worthwhile spending much time and effort negotiating over a small down payment, if you got the benefit of living in the home and he is now voluntarily removing you from the obligation for the mortgage. (He does not have to refinance: he could leave you obligated on the mortgage even if you have broken up. The fact that he is apparently willing to remove you from the mortgage is already a considerable benefit to you.)


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