Major Problems, Repossession Possible

Wootty

Long story, sorry in advance. I'll try to shorten where possible.

My girlfriend is seperated from here family in living situation, she lives with me. In 2008, she passed them a 10k deposit on a 110k house. Agreed to put her name on the mortgage as if they needed help to pay it, she would.

Fastforward to January 2010, the family just tell her they've lost the house and the building society plan to repossess it. They have no assets, so they're fine. My girlfriend has way more assets and I guess stands to lose a lot more. They've not paid the mortgage for months, but my girlfriend doesn't want to lose the house with all her money already invested.

What are our next steps? They're both on the mortgage (her and her sister) as to pay it, but only her sister was paying (or so we thought), so we didn't find out until today about this.

We have enough money to take the house off them but now we're in a muddle because we've been told so late. I can only think of following options;

1. Let them repossess the house, lose all equity (plus, maybe more assets, how much can they legally take?)
2. Pay off the debt, let them try to take the mortgage on again as usual, if the building society allow it.
3. We have savings accounts. We could pay a big lump sum off the house now if they would allow it, but what about early repayment charges/restrictions? How will this hinder it?
4. We could take the house on, pay the debt, and rent it out to people.

What is the best option, or is there another one? It's been a hellish day and any advice is appreciated as I can't think too straight atm.

Xbigman

Under no circumstances let the lender repossess. They will sell the property on cheap after sticking a lot of fees on and you will get a big bill to pay afterwards. At least thousands maybe tens of thousands.

If your GF is named on the mortgage she should have been informed when the first payment was missed. She should give the lender a call and find out the exact current situation and what time line there is for any court action. That will determine what can be done.

For myself I would certainly look to buy the property outright and rent it out for a while until the market recovers. The other possible option is to bail out her family but it could be money down the drain. That is as much a personal decision as a financial one.

Time to get more information and do some number crunching.
Regards


X

PS. Does your GF own a percentage of the property or is she just on the mortgage? It makes a difference.