can anyone help i have helped a friend with money and now i'm in trouble

pleasehelp123uk

well it all started about two years ago when i found that a very good friend was going to sell there house to an equity release company for 17k.

she had lost her husband about 9 month earlier and he had taken lots of small loans against the house that she could not pay so she descided to take equity release i.e they were going to give her 17k for a house valued at 136k and she lived there rent free for life.

i was very worried that this could be the wrong thing for her to do and at that point i also wanted to buy my first house, she said that it was ashame that she could not help me as i had helped them for years. infact i was told that i was the person that was ment to inherit the house.

so to cut a very long story i when to see a morgage broker and he said that even thow i had income to pay a morgage i would need a deposite witch i did not have so, he sujested that my parents remorgaged there house put they are died so that was not happening whilst talking i mentioned my friend and he sugested that we both go and see him as he could help,so i told my friend and down we when.

after a lot of thought we decided that he was right we could help each other. firstly we both took out no-states morgages that where interest only and i agreed to pay her loans off and give her 25k to do her house up.

I would pay the morgage for the term and she could live there rent free for life and at the end the house would be mine just as she and her husband had always wanted.

Nether of us have ever had a morgage before and did not understand that all we would be paying was the interest and not the loan so at the end of the term we will still have the debt.

we are now two years in and i have never missed or made a late payment but i feel that i'm pooring money down the drain also it was a morgage that had a low start but now it has gone from up so high.

i have remorgaged my house and we have tried to do the same on my friends house but she is to old and only on state pension so she cannot get a morgage.

i have asked if i can put the house in my name so that i can get a morgage and all can stay the same but she would seem to have changed her mind and does not want to give me the house yet so i'm now faced with the problem of what to do?

she has now gone to a solicitor and i'm beside myself as to what to do it all started of as such a good plan but now i think it is going wrong i'm paying all the morgage, she is living rent free and has been for two years we have no agreement the money is trace able going into my house but there is not the money in my house to remorgage and pay it back.

can she take me to court?

i'm so sorry for going on so long but can anyone help please

savvy

Hi pleasehelp123uk and welcome to the site sorry your first post is not a very happy one.

I'm not brilliant at leagal things but wondered if you'd sought any advice from your local Citizen's Advice Bureau or have rung a solicitor?

pleasehelp123uk

no i only found out that she has gone to a solicitor tonight so hope someone here could put my mind at rest but i will soon i guess, more money its ok for my as i bet it all legal ad!!!

yummymummy_2

I think you need to give more details of your current situation. Is the mortgage in your friend's name? If so, she is responsible for the payments. Do you make the payments into your friend's bank account to enable her to pay the remortgage? If this is the case then I would stop doing that asap. As you have discovered, you are getting a very poor deal here. From what you say, it sounds as if there is no legal binding document that compels you to make the repayments here so I would get yourself out of this situation pronto.

pleasehelp123uk

hi Yummymummy
you are right on all counts but surely she has some recourse because the money came from her account into mine and i have been making monthly repayments to her.

the last thing i want to do is for her to lose her house but what she is doing is now forcing my hand.

nrsql

>> after a lot of thought we decided that he was right we could help each other. firstly we both took out no-states morgages that where interest only and i agreed to pay her loans off and give her 25k to do her house up.
I would pay the morgage for the term and she could live there rent free for life and at the end the house would be mine just as she and her husband had always wanted.

Not sure what has happened here. Are there two mortgages involved?
You gave her £25k which implies that you took out the only mortgage but sounds like you are giving her money to pay the motgage implying it's in her name.

>> I would pay the morgage for the term and she could live there rent free for life and at the end the house would be mine just as she and her husband had always wanted.

Any proof of that? Is it in a will (which can be changed at any time).
What happens if she gets married again?

>> a very good friend.
Is that still the case - sounds like the relationship might be a bit strained. Do you know why she went to see a solictor?
Could just be that she wants to find out if it's possible for her to give you the house and still guarantee to stay there (a sensible thing to do).

pleasehelp123uk

sorry two morgages i make the repayments on it all so she borrowed more that was required to set things up giving her £25k.

no proof of that and she will never remarry

yes a bit strained, she tells me that the solicitor is about recourse on the morgage company/broker and not me but i'm not sure as she has broken her word all the way because she said at the out start she would put the house i my name after the low start period of the mortgage was up.

nrsql

>> she will never remarry
That's what we all thought about my grandmother in her 90's.

So one mortgage in her name and one in yours on the same property?

I would have thought the solicitor would want to speak to both of you.

I think you need to get advice and at least try to get evidence of the intentions.

pleasehelp123uk

ok point taken on the remarriage.
she has a morgage in her name on her house and i have a morgage on my house two seperaty house and morgages.
i have no evidence of her intentions just what she has told both myself and wife, nor she has from us any evidence that we will repay her.
why would you think her solicitor would be able to help me, i would not think he can act for both sides and if she does not get what she wants from the broker/morgage company i believe she will come after me because she is now asking what my house is worth. that tells me that the solicitor is trying to make a case?
i have look at the paperwork in the last few days and we both signed separetly with the broker that we had, had it all explained to us and it is in the small print but we had not, and i think that will get the broker / morgage company of the hook leaving only me she can come back to but i have been so far i think for the last two years

nrsql

Sorry - didn't realise there were two properties involved. I've reread the thread and notice you mention remortgaging which seems to be the problem as I guess you are struggling to keep up the payments.

You said initially that you paid her 25k and paid off her loans but I suspect that money came from her mortgage.
I assume there's nothing connecting the two mortgages so:
She mortgaged her property, gave you the deposit for your house and in return you give her the money to cover her mortgage payments.
You have a verbal agreement that you will inherit the house.

Interest only mortgeges are quite common but I would have thought that the broker would have made sure you understood that you need to make other provision to pay it off (that could be part of her complaint). You're not pouring money down the drain - the idea is that you use the extra money you would have used for a repayment to better effect elsewhere.

I would think that you are not involved in her mortgage and the broker will have taken her on as a client independantly.
Do you know the grounds of the complaint?

Don't see how they can have a case against you - maybe for the deposit she gave you if that could be considered a loan, but then you have been giving her money monthly.

Sounds like a mess and I feel sympathy for you.
Mainly that financial dealings are causing problems in a long friendship.

pleasehelp123uk

"Do you know the grounds of the complaint?"

yes she is saying that the broker never told her about what an interest only morgage was and that i new but that is not the case he told us both and we both said that the properties would go up in value and we would change the morgages to repayment after the low start now the low start is finish the repayment have go up by £300 per month and are now much more expensive than a repayment.
i have changed my morgage and all is well but she cannot get a morgage on repayment because she is to old and only has her state pension so as we agree at the out start the house should be in my name so i can get the repayment morgage but sudenly she will not put the house in my name so she is making me pay £150 per month more than i have to.

the last thing i want to do is leave her in the sh*t but i will not pay more than i have to and be left with nothing at the end.

but if i stop paying she would lose the house in months, i guess and her solictor would surly look at me for recourse "god what mess"

you are right on all other points bar the one about struggling with repayments i just dont see why i should pay more for somthing that will never be mine and if i continue to pay as i will, when i have paid her the money i used back then she will lose the house anyway.