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Buying Housemate out of Mortgage Help Needed
lordgaz
Posts: 102 Forumite
Hi All
I need some advice on behalf of my sister-in-law.
She bought a house with a friend 2.5 years ago. They bought with 100% interest only mortgage with separate endowments
The friend has got herself into financial trouble with her business and currently owes over £26,000 (though she has only admitted to owing £8000 to my sister-in-law) and she is likely to get some CCJ's
The firend now wants to re-mortgage the house to get whatever equity is there to pay off her debts - we know this is a bad idea. (And should be very hard if she has CCJ's yes?)_
What is the formula for calculating bying her out of the house? As I see it, the only payments that have been made so far have been for the interest on the lump sum amount - so this is like rent, and unreclaimable ??
Does she just have entitlement to half the equity, minus any expenses incurred? How is it worked out? (edit: of course the housemate would be relieved of their mortgage commitment too which would be paid by my sister-in-law)
I hope someone can advise...
Cheers
Gaz
I need some advice on behalf of my sister-in-law.
She bought a house with a friend 2.5 years ago. They bought with 100% interest only mortgage with separate endowments
The friend has got herself into financial trouble with her business and currently owes over £26,000 (though she has only admitted to owing £8000 to my sister-in-law) and she is likely to get some CCJ's
The firend now wants to re-mortgage the house to get whatever equity is there to pay off her debts - we know this is a bad idea. (And should be very hard if she has CCJ's yes?)_
What is the formula for calculating bying her out of the house? As I see it, the only payments that have been made so far have been for the interest on the lump sum amount - so this is like rent, and unreclaimable ??
Does she just have entitlement to half the equity, minus any expenses incurred? How is it worked out? (edit: of course the housemate would be relieved of their mortgage commitment too which would be paid by my sister-in-law)
I hope someone can advise...
Cheers
Gaz
No reliance should be placed on the above.
0
Comments
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It looks to me they split the property 50/50 so your sister in law can buy the other half out.0
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Your sister-in-law could make an offer to the other party. To calculate the offer, your SIL should get three valuations and base her offer on these numbers. SIL may also consider the costs that would be accrued should it be decided that the house was sold. That may depend on how much of a friend the other party is.
Once the transfer of equity is decided, you need a solicitor (conveyancer?) to handle the legal aspects.
It may be appropriate for SIL to offer a tenancy to her friend but personally, I'd be tempted to sell and buy elsewhere to avoid any tension between the two parties should house prices rise or fall significantly.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
thank you very much for the advice.No reliance should be placed on the above.0
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