Bought a house with 2 mates and now we need a way out.

Bootsox

Not a legal expert so I only post this as a note of caution:

I know that your solicitor drew up a "document of trust" but as far as your mortgage lender is concerned you may all be "jointly and severally liable" (see under Wikipedia).

So irrespective of the DOT, the lender may chase the individual who it thinks it has the greatest chance of a return and then it will be up to him to wrestle money out of the other two via the DOT. If your mates are not working how are they paying their share of the mortgage?

Otherwise, as you have already more or less worked out yourself, there are only a limited number of (unpalatable) ways of unravelling the situation:

• Hang on hoping that the housing market will recover (if it is anything like the the last housing crash it could be 10 years for the NE to disappear).
• Go for a sale and take the hit but the lender may chase you for the shortfall.
• Rent out and be prepared to fund the mortgage deficit.
• The nuclear option (where you either walk away or declare yourself insolvent).

Have you taken separate legal advice?

From a personal point of view you must keep the other two sweet and "on side" (a least until you extricate yourself from this situation).

Regards

Sox

gizmo111

The £800 mortgage is it interest only or repayment?

mlz1413

1) Ringing your mortgage company and find out if they will give you permission to rent.

2) Also ask them if you can change to an interest only mortgage, if you paid £136k and your monthly payment is £800 it sounds like you are on a repayment mortgage.

3)
Get 2 or 3 estate agents round to value your place for sale and rent and advise fees.

4)Get yourself and the other 2 owners together and all bring written down ideas of ways forwards, discuss how you want to deal with the problem.

another option to the ones suggested before: As 2 of you have expecting partners could the 3rd owner get 2 lodgers to cover mortgage payments and bills?

the 2 who lost their jobs have they worked since? are they likely to get jobs?

clutton_2

why cannot those who are out of work claim Local Housing Allowance (used to be Housing Benefit) for their share of the mortage payments ?

lonestar1

clutton wrote: »

why cannot those who are out of work claim Local Housing Allowance (used to be Housing Benefit) for their share of the mortage payments ?

Isnt LHA Only for those who rent ?

The government has other schemes meant to help those who cant pay their mortgage

clutton_2

yes - u r right LHA is for rent - but there are schemes for mortage interest payers. A long time ago it used to be that you had to be out of work for 9 months before the Social would pay your mortgage interest rates - but our Gordon says he has put in place scheme which kick in earler than they used to

i would advise OP to talk to the local Benefits agency office for some advice on claiming mortgage interest