friend has walked away from mortgage.

Dav82w

Hi, hope someone my have some helpful advice for me.
I bought a house with a friend 4 years ago to make some money.Obviously because of the economy this hasn't happened. My friend has recently got a new girlfriend and has decided that he doesn't have to pay the mortgage any more as he hasn't lived there for 6 months. Both our names are on the mortgage so Im pretty certain that ain't true. This month I've had to pay a £900 mortgage on my own,which is tough! He wont pay so what can I do?
I've spoken to mortgage lender, and they weren't much help.They talked about taking a mortgage holiday but that would add nearly 2500 to the mortgage amount,thus afterwards bringing my monthly payments up.Not an option as I'm struggling as it is.They also talked about interest only but I would need his signature to do this and thats unlikely as I cant get hold of him.
So I think I'm toast unless I can get a lodger in to help me out, but what do I do about him? Surely you cant just walk away? Is there anything legally I can do?

PasturesNew

You bought it to share... so get a lodger. If your ex-friend's not paying, you have to keep up with the payments at any cost, or, just let it slide and be stuffed for years to come as it's repossessed... and they still come chasing after you for the difference.

So get a lodger, even if you have to move into the smaller room to get the best money you can.

You can check out:
1] Proper lodger, full-time
2] mondaytofriday.com and similar sites for Mon-Fri lodgers
3] Crashpadder and similar sites for occasional people

pararct

Dav82w wrote: »

Hi, hope someone my have some helpful advice for me.
I bought a house with a friend 4 years ago to make some money.Obviously because of the economy this hasn't happened. My friend has recently got a new girlfriend and has decided that he doesn't have to pay the mortgage any more as he hasn't lived there for 6 months. Both our names are on the mortgage so Im pretty certain that ain't true. This month I've had to pay a £900 mortgage on my own,which is tough! He wont pay so what can I do?
I've spoken to mortgage lender, and they weren't much help.They talked about taking a mortgage holiday but that would add nearly 2500 to the mortgage amount,thus afterwards bringing my monthly payments up.Not an option as I'm struggling as it is.They also talked about interest only but I would need his signature to do this and thats unlikely as I cant get hold of him.
So I think I'm toast unless I can get a lodger in to help me out, but what do I do about him? Surely you cant just walk away? Is there anything legally I can do?

If you cannot afford the mortgage on your own you need to sell it. If you are unable to keep up the payments, at some point they will come and take the property from you.

Track down your friend tell him you both need to sell this property quickly unless he wishes to contribute towards the mortgage. Until such time as the Mortgage is discharged (property is sold) and provided there is no shortfall you are both jointly and severally liable for the mortgage. This means that if the property was to be repossessed and was subsequently sold with a shortfall on your mortgage amount they would pursue you both quite vigorously for the balance. On the other side of the coin of course should there be any money left over then it would be split between you.

TBH Your mate sounds a bit dense!! If there is any equity in the property consider seeing a solicitor with a view to getting your friend to sign his half over to you.....;)

How come you cannot get hold if him? Surely you must have some contact details?

Mojisola

You do need to do something - if you keep up with the mortgage, you will be preserving his share of the house and, when it's sold, he will expect to be given his half. Didn't your original agreement have clauses about what happened if one person stopped paying the mortgage or wanted to leave the arrangement?

Dav82w

Thanks for the websites pastures new.I'm pretty sure I can get a lodger.But he cant get away with this?!

PasturesNew

It's up to you to take him to the small claims court for any money you feel he owes you.

But that takes time and more money - and you'd need to find him. And then he'd need to bother to pay.

Step 1: Self preservation.

G_M

The difficulty you have is that the property is in your joint names. So even if you take over paying the full mortgage, he still owns half the property. When you come to sell..........

Your post is a bit unclear as you say you bought the property "to make some money" but you live there rather than it being a BTL. Presumably the money to be made was from capital growth?

You really need to sit down with your friend and a gree a way forward>
*sell and split the gains/losses
* buy out his half-share (if you can)
* take over paying his half of the mortgage ( and maintenace costs etc) but agree a new split on ownership (ie 40/60 split, or you get to keep the 1st £X from the eventual sale before the rest is split 50/50 with £X = your total extra contributions to the mortgage)

I'm afraid joint property purchase is a bigger commitment than marriage, and when entering it, it is wise to consider all possible future eventualities and agree in writing how they'll be dealt with - do that now. Better late than never.

Dav82w

It is up for sale.Perhaps I should of mentioned that.Not had much interest though, a couple of viewings in 6 months.Its not going to make much money, infact there's probably no equity at all. Im thinking i should try and get him removed from the mortgage, get a lodger or two in until the housing market picks up again.It maybe years until that happens, but atleast my credit rating stays intact and I may make some money in the future.

jimjames

Dav82w wrote: »

It is up for sale.Perhaps I should of mentioned that.Not had much interest though, a couple of viewings in 6 months.Its not going to make much money, infact there's probably no equity at all. Im thinking i should try and get him removed from the mortgage, get a lodger or two in until the housing market picks up again.It maybe years until that happens, but atleast my credit rating stays intact and I may make some money in the future.

If there is no equity and he isn't paying the mortgage and you can keep the house with a lodger then that definitely sounds like a good plan

G_M

Dav82w wrote: »

It is up for sale.Perhaps I should of mentioned that.Not had much interest though, a couple of viewings in 6 months.Its not going to make much money, infact there's probably no equity at all. Im thinking i should try and get him removed from the mortgage, get a lodger or two in until the housing market picks up again.It maybe years until that happens, but atleast my credit rating stays intact and I may make some money in the future.

Sell. Forget the 'moneymaking' scheme - it's trouble. If you can sell and pay off the mortgage (and hopefully have a little over too), then do it. Then start again older and wiser! If it's not selling, reduce the price till either it sells or you can't afford o pay the mortgage off (in which case you have got a problem!)

Or take it over. But
a) he has to agree to come off the deeds as well as the mortgage and
b) the mortgage lender has to agree to let you take over - is your income enough for them to agree? Rent from lodger will not be taken into account by them.

brit1234

Dav82w wrote: »

It is up for sale.Perhaps I should of mentioned that.Not had much interest though, a couple of viewings in 6 months.Its not going to make much money, infact there's probably no equity at all. Im thinking i should try and get him removed from the mortgage, get a lodger or two in until the housing market picks up again.It maybe years until that happens, but atleast my credit rating stays intact and I may make some money in the future.

Highly unlikely, you bought at the peak of the housing market. House prices are continuing to fall and will do for some time as so overvalued. There will be no quick recovery just look whats happening to Greece and see what happens when it moves to Spain and Ireland. Things are going to bad economically here for years so you need to factor it in.

If you can sell now whilst you still have equity left but you will have to price under the competition.

If you are thinking about a long hall with tenant then you will have to have cash set aside for void periods just in case.