Refinancing and Buying Out a Co-Owner in Mississippi — FAQ

This FAQ explains how a co-owner can refinance and buy out the other owner of real property in Mississippi. The article assumes no prior legal knowledge. This is educational information only and not legal advice. If you need legal advice for your situation, consult a Mississippi attorney.

Detailed answer: How the refinance-and-buyout process works (step‑by‑step)

1. Confirm who legally owns the property

First, check the deed to see how title is held (tenants in common, joint tenants, tenancy by the entirety for married couples, or another form). The deed and county land records show legal owners and ownership shares. If you don’t have a copy, request a copy from the county recorder or run a title search.

2. Decide the buyout number

Agree on the buyout amount. Common methods:

• Get a professional appraisal to determine fair market value, then pay the other owner their share of equity (market value minus outstanding mortgage and costs).
• Use a realtor’s market analysis or an agreed-upon fixed price.

3. Determine how to fund the buyout

Typical ways to fund a buyout:

• Refinance the mortgage into a new loan with only the buying owner on the loan (cash‑out refinance or new sole-owner mortgage). The new loan pays off the old mortgage and provides cash to buy out the co-owner.
• Get a personal loan or home equity line of credit (HELOC) if the lender permits.
• Sign a promissory note to the selling owner and pay over time (requires careful documentation and may remain a lien risk).

4. Talk to lenders early

If you plan to refinance, contact lenders before finalizing any buyout agreement. Lenders will underwrite the buyer’s credit, income, and the property’s value. The lender must approve removing the other owner from the loan—if the other owner’s income or credit supported the prior mortgage, qualifying alone may be harder.

5. Reach a written buyout agreement

Put the buyout terms in writing. Typical terms include the buyout amount, payment timing, how closing costs are split, who pays taxes/insurance pro rata, and what deed will be executed. A written settlement prevents disputes.

6. Handle the mortgage and payoff

At closing, the new lender typically pays the existing mortgage off. The selling owner’s mortgage liability is removed only if the original lender is paid and releases its lien. Make sure the payoff is complete and that the lender issues a release or satisfaction of mortgage.

7. Transfer title

The selling owner will execute a deed conveying their interest to the buying owner. In Mississippi, sellers commonly use a quitclaim deed or a warranty deed depending on desired assurances. Record the deed at the county land records office where the property is located. Recording gives public notice of the ownership change.

8. Get title work and a release of liability

Have a title company perform title work. Obtain (a) the recorded deed showing the buyer as sole owner and (b) proof the original mortgage was satisfied. If the selling owner was on the loan, insist the lender remove them or confirm the old mortgage was discharged so their liability is gone from public records.

9. Consider tax and legal consequences

Buyouts may have tax consequences (capital gains, gift tax in some transfers, or tax basis issues). Talk with a tax professional. Also consider whether the transaction affects any estate planning, liens, judgments, or family law issues.

10. If you disagree or cannot qualify

If owners can’t agree on price or one owner cannot qualify for a refinance, options include:

• Mediation or negotiation to reach a sale or buyout plan.
• Sell the property and split proceeds.
• Pursue court partition (a forced sale) as a last resort — this is costly and time-consuming.

Mississippi law considerations

Mississippi law governs deeds, recording, and mortgage satisfaction. Title and recording rules fall under the Mississippi Code addressing real property. For general reference to Mississippi statutes on real property and recording, see the Mississippi Code resources on the Mississippi Legislature website: https://www.legislature.ms.gov/mississippi-code/ (search Title 89 — Real and Personal Property for provisions on conveyances and recording requirements). Recording the deed and mortgage satisfaction in the county where the property lies provides public notice and protects ownership rights under Mississippi law.

Sample timeline for a typical refinance-and-buyout

1. Week 0: Owners agree to pursue a buyout and order appraisal.
2. Week 1–3: Buyer applies for refinancing; lender orders appraisal and underwriting begins.
3. Week 3–6: Lender issues commitment; closing date set; payoff figures requested.
4. Closing day: New loan funds, old mortgage paid off, seller receives buyout funds, seller signs deed, title company records deed and mortgage release.

Key documents you will need

• Current deed(s) showing all owners
• Recent mortgage statement and payoff demand
• Appraisal or broker price opinion
• Buyout/purchase agreement or settlement statement (written)
• Deed to transfer ownership (quitclaim or warranty deed) and any required notarizations
• Title commitment and closing/settlement statement

Helpful Hints

• Get a professional appraisal if you want a defensible buyout price.
• Talk to lenders early to confirm you can qualify alone.
• Use a title company or real estate attorney to ensure proper payoff, lien release, and recording.
• Put all agreements in writing before any money changes hands.
• Ask the selling owner to sign a deed and ensure the lender issues a mortgage satisfaction so the seller’s liability is removed from public records.
• If you can’t qualify for a refinance alone, consider a co-signed loan, a bridge loan, or an installment sale (promissory note) — but document everything and get title protection.
• Keep copies of recorded documents (deed and mortgage satisfaction) as proof of the completed transaction.
• If disputes arise, consider mediation before expensive litigation such as partition suits.

Disclaimer: This is general information about Mississippi procedures and is not legal advice. Laws and procedures change. Consult a licensed Mississippi attorney or title professional for advice about your specific situation.