help joint mortgage no equity

nlaw2001

Hi all I made a wrong business decision 5 years ago. I bought a property with family member as investment. We then fell out and I have had nothing to do with property for over 4 years. I believe he rents property out and property is in negative equity. I would like to get out of the mortgage but I am not sure if his salary is enough to get the mortgage on his own, although, the mortgage is paid for by rent. Is there anyway for me to get out of this Mortgage or will I have to wait till property is back in equity and se if he will sell.

Thanks.

holly_hobby

If this is under a BTL mge, the rental income will be the primary income assessment (notwithstanding any min income requirements which not all lenders have), so his income may not be a deal breaker, although the negative equity situation may well be, and will certainly prevent any remortgage to an alternative lender at this time.

You need to sit down with the individual (as their agreement as well as yours is required to effect the transfer of equity), discuss the situation and contact the lender for guidance on if the would be agreeable to your release, and if so, what formalities do they want satisfied to effect the change.

Hope this helps

Holly

nlaw2001

Thank you Holly,
The negative equity is about 80k so it might be a problem.

holly_hobby

Well only by speaking to the lender will you know if they will refuse your TOE application, regardless of affordability.

If they do, the only option to relese you would be to sell the house, obv you and other owner will both be jointly and severally (singularly) liable for repayment of the neg equity which may be pursued for a period upto 12 yrs (to which the lender may agree to come to a reduced settlement or regular payment arrangement).

Other than that, you're stuck until the foreseeable ....

I would also say that, as joint owner of a let property you should be making regualr HMRC returns, even if you receive no financial benefit (although legally entitled to 1/2 of the rental or whatever the agreed split was at pch).


Hope this helps

Holly