Shared house, mortgage deal ending soon....

young_lady

Dear All,

I am a first time poster but regularly look through the MSE forums - hopefully I am posting in the correct place! I apologise in advance for the long winded nature of my query.

My problem is this: a friend and I jointly own a house which has a mortgage, in equal shares (i.e. same deposit, same monthly repayments...). Shortly, the mortgage deal we have will be coming to an end and I don't know what to do for the best.

This is a friend that I have known for many years, so thought I knew her very well, however my views/feelings have changed. I assumed she would be a tidy, unselfish and capable housemate, but I was wrong! Also, since purchasing the house my personal circumstances have changed - I was single when we started looking and exchanged on the house, but I now have a partner.

Basically, I am unhappy living here and the thought of signing up to another two year (minimum) mortgage deal fills me with dread as I will definitely lose patience by the time that deal is finished. I am the only one that does any cleaning and housework, when something goes wrong I am expected to sort it out, I could go on for ages and make a whole list of annoyances but...........

Secondly, my partner and I are at the stage where we would consider moving in together and planning for our own future.

Therefore, when we get the letter from the mortgage company saying that the mortgage needs to be renewed, should I take my opportunity to then jump ship? Either suggesting we sell the house and split the proceeds (we should have around £30k equity to share based on recent sales of similar houses and what we paid for it), or I would happily sell my share to my housemate if that was an option for her. I am reluctant however to let out my room/share of the house or to pay towards the mortgage if I am not there - as I said I am the only one who keeps the house so it would end up an absolute tip and reduce the value when it did come to be sold.

Also, if I were to continue living there and we did sign up to another deal and then fell out during that deal period, there would be a sizeable early repayment charge to pay if we were to sell.

Ultimately, do I do what is best for me, or do I continue as we are so as to keep my housemate happy.... I have always worried about upsetting other people and sacrificed my own feelings, but I do think this is one time when I do what I want. Am I being selfish?

Hopefully, there'll be other posters who have been in a similar position that can help to answer my questions, although in my head I have perhaps already made up my mind...

Many thanks in advance for any comments.

Tixy

If you are ready to move now then I would bring the subject up with her - have you discussed it all yet?
When you originally bought the property did you discuss/come to an agreement as to what you would do if one wanted to sell when the other did not?

If you think you might want to move soon, but not yet then you could always consider staying with your existing provider but not going for a fixed deal. Do you know what rate your current mortgage will revert to (its usually the bank's SVR) and do you know what rate that is?
Or you could shop around for other deals that have no early repayment penalty.

young_lady

Thank you for replying so quickly Tixy.

No, we have not discussed it yet - being such a daydreamer I'd be surprised if it had crossed my housemate's mind that the mortgage deal will be ending soon (by soon I mean mid July).

As for an agreement, we were advised at the time that because there were so many potential possibilities/pitfalls/situations that could come up in the future, it would not be worthwhile creating one.

I have found out what the SVR would be and this is 2.76% higher than what we are currently paying - so a considerable increase.

I hadn't considered a deal with no early repayment penalty - I assumed they would all have some kind of penalty so will definitley look into this further should I need to. Although I guess this may just delay the inevitable.....

xylophone

"As for an agreement, we were advised at the time that because there were so many potential possibilities/pitfalls/situations that could come up in the future, it would not be worthwhile creating one..."

By whom? I would have thought that the standard advice when buying with a friend was to have an agreement in place for just this scenario!

I would have thought that it was fair to both of you to discuss the matter with your friend now.

You are clearly not happy with the situation so give her the choice of either buying you out or selling the property.

young_lady

Thank you Xylophone for replying.

It was our solicitor that advised us an agreement would not be worthwhile.

I am going to bring the issue up in the next week or two and see what the response is. You are right that I am not happy with the situation and will either suggest she buys me out or we sell and split the proceeds.

As I said in my OP, if anyone has found themselves to be in a similar situation, I'd be interested to hear how things worked out for them.

Richard_Webster

It was our solicitor that advised us an agreement would not be worthwhile.

Not sure I totally agree but there is something in this.

If you have always had everything 50/50 then it is fairly easy to work out how much each of you should get if the place were to be sold. Is the friend suggesting any other split?

The difficulty is getting it sold. You could have some wording that says that if one gives the other a month's notice it must be sold. So you give the notice and the other one ignores it and you say "I've given notice under the agreement so let's get the estate agents round"
The other one says "I'm not selling..."
"But you must, the agreement says so..."
"Well, its not convenient..."
"You've got to..." (Waves agreement as if it has some magic power....)
"You make me...."

So, unfortunately whatever you put in such an a agreement if the other won't sign you will have to take them to court. Hopefully it won't get that far in this case.

The real guts of such an agreement are more about calculating each person's share than making it easy to compel a sale because that is never easy.

G_M

The reality is that joint property ownership is a bigger commitment than marriage.

At least you seem to have a straight-forward financial split - 50/50 on everything. That cuts out the arguements about who owes who what and why (hopefully).

As said, the issue is that if one person wants to sell and the other does not, it's virtually impossible to force them to. Unless the 'stayer' can afford to buy out the 'leaver's' share (unlikely) the 'stayer has to sell too - and move. Which they may well not want to do. They have a home, a mortgage, and thought they had a long term plan with stability...

Which of course is why it helps if you have discussed/agreed up front what will happen in this situation. Though as Richard says, you still have to force them...