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Proportional repayment of ERC on joint mortgage
Tootles
Posts: 1 Newbie
Hi,
I know there's a thread about reclaiming ERC from banks but this scenario doesn't quite fit with that.
My partner took out a joint mortgage with a friend for a property they rennovated together. 2 years later they remortgaged but shortly after his friend wanted out to move in with his fiance. They agreed to sell the property rather than buy one another out (my partner couldn't have afforded the mortgage on his own and I wasn't going to be considered a good lending proposition). My partner agreed to split the costs and ERC 50/50 which I thought was very decent of him, since it was his friend who wanted to move out.
Following the sale my partner was keen purchase another property following the downturn in the market. He remained in contact with the mortgage lender as they had indicated he could 'take' the mortgage with him should he find a suitable property within the life of the mortgage.
He found a house and purchased it using the same lender and although its not exactly the same rate as they had previously it was still a favourable mortgage. The lender then repayed him his proportion of the ERC for the joint mortgage. As he had borrowed more than 50% of the value of the original mortgage the lender wrote to his friend to inform him that if he agrees to sign it over my partner can receive a further repayment proportional to the additional mortgage taken.
Unfortunatley his friend is quering why the lender isn't paying that money to him. He feels he should get a proportional repayment of his 50% of the ERC. He has apparently been advised by his solicitor that the lender are not acting correctly and he should be entitled to the money. My partner isn't really too bothered, he didn't want to ask his friend to sign the money over as he didn't believe he would do it anyway, and he has been proven right. He also thinks its only about £300! But his 'friend' is adamant the money should be his, despite meeting with the lender who have told him otherwise.
I guess my question is; is this normal practice?
P.S. sorry for the long post...
I know there's a thread about reclaiming ERC from banks but this scenario doesn't quite fit with that.
My partner took out a joint mortgage with a friend for a property they rennovated together. 2 years later they remortgaged but shortly after his friend wanted out to move in with his fiance. They agreed to sell the property rather than buy one another out (my partner couldn't have afforded the mortgage on his own and I wasn't going to be considered a good lending proposition). My partner agreed to split the costs and ERC 50/50 which I thought was very decent of him, since it was his friend who wanted to move out.
Following the sale my partner was keen purchase another property following the downturn in the market. He remained in contact with the mortgage lender as they had indicated he could 'take' the mortgage with him should he find a suitable property within the life of the mortgage.
He found a house and purchased it using the same lender and although its not exactly the same rate as they had previously it was still a favourable mortgage. The lender then repayed him his proportion of the ERC for the joint mortgage. As he had borrowed more than 50% of the value of the original mortgage the lender wrote to his friend to inform him that if he agrees to sign it over my partner can receive a further repayment proportional to the additional mortgage taken.
Unfortunatley his friend is quering why the lender isn't paying that money to him. He feels he should get a proportional repayment of his 50% of the ERC. He has apparently been advised by his solicitor that the lender are not acting correctly and he should be entitled to the money. My partner isn't really too bothered, he didn't want to ask his friend to sign the money over as he didn't believe he would do it anyway, and he has been proven right. He also thinks its only about £300! But his 'friend' is adamant the money should be his, despite meeting with the lender who have told him otherwise.
I guess my question is; is this normal practice?
P.S. sorry for the long post...
0
Comments
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In short.......ask the lender0
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