Trying to get out of a joint mortgage

sanastars13

Help, really need some advice

Two years ago me and a friend decided to buy a flat together for £200,000 for which we both put £5000 in as a deposit. I have now decided that I would like end our joint mortgage and move in with my boyfriend.

We had the property valued and unfortunately the flat has lost value and is now worth £170000 with us still owing £184000 on it. Me and my boyfriend have offered to buy my friend out of the mortgage and do not expect and money from her for the loss in equity.

However she is now demanding the £5000 she put in as a deposit back. Is this correct? Is this what she is entitled to? Because with the money me and my boyfriend are having to put into the flat to be able to take it on ourselves we can not afford this extra expense!

opinions4u

sanastars13 wrote: »

Two years ago me and a friend decided to buy a flat together for £200,000 for which we both put £5000 in as a deposit. I have now decided that I would like end our joint mortgage and move in with my boyfriend.

We had the property valued and unfortunately the flat has lost value and is now worth £170000 with us still owing £184000 on it. Me and my boyfriend have offered to buy my friend out of the mortgage and do not expect and money from her for the loss in equity.

However she is now demanding the £5000 she put in as a deposit back. Is this correct? Is this what she is entitled to? Because with the money me and my boyfriend are having to put into the flat to be able to take it on ourselves we can not afford this extra expense!

From a purely financial perspective, I would say your friend should be giving you money for getting her out of this negative equity situation.

BUT:
She has a right to stay in the property. It's jointly hers and she doesn't have to sell. She could become a magnificent and unbelievably awkward gooseberry and there is, in my opinion, nothing you could do about it if she chose to do this.

I would feel a bit peeved at being made homeless and not having any money to show for the blood sweat and tears (and deposit) that I'd ploughed in to the property. I could do with a few grand to help me start again!

It's not a black and white situation. Anybody choosing to buy with a friend in this way should get some sort of legal agreement drawn up at the start to clarify exactly what should happen if this situation should (as it inevitably will) arise.

NB: I assume your lender is happy with your plans - have you confirmed that they are happy to release her from the mortgage and add your boyfriend on?

poppy10_2

Theoretically she is liable for the £14,000 negative equity as much as you are - to ask for the £5000 back is a bit cheeky