We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Selling a shared house thats in negatvie equity
Comments
-
What you have done is shared the mortgage shortfall rather than the overall loss of equity. So you have left OP with 100% of the loss of equity and offset it by 39% of the mortgage shortfall. If nothing else the friend should bear 50% of the mortgage shortfall as he is responsible for 50% of the mortgage.
There has been a loss of equity here of
(210 -165) - (110 - 147) = 45 + 37 = 82
OP's friend should be putting his hands deeper in his pockets than £14,300
So he would have to give me £14,300, not £30,600?0 -
has the house actually lost so much value?
From £215K to £110K is a massive drop in value.If you've have not made a mistake, you've made nothing0 -
Wrong. So he would have to give £30,600, not £14,300.
I am now convinced. My original calculation was wrong, so ignore post 2.
Why dont you edit your original post to avoid confusionNow buying our second house:
Accepted offer 16/12/18. Offer accepted 26/1/19. Buyer pulled out 4/2/19. Accepted new offer 13/2/19
FTB: Offer accepted 23/2/2013 Mortgage application 28/2/2013 Valuation: 4/3/2013 Valuation ok 15/3/2013 Mortgage Offer 21/3/2013 Exchange 10/4/2013 Completion 26/4/21030 -
Wrong. So he would have to give £30,600, not £14,300.
I am now convinced. My original calculation was wrong, so ignore post 2.
Okay, but look at it this way... If we sold the house on the open market we would get £110,000.
We would then both owe the bank the negative equity of £37,000. So why would he owe £30,600 of this? See what I mean? Im a bit confused.0 -
What the original calculation fails to recognise (I think) is the hidden effect of of 'gearing'. You friend borrowed 100% of his investment (£82500 out of £82500). You borrowed only 62% of yours (£82500 out of £132500).
That's why his losses may seem exaggerated to you. But so would his 'gains' have been if you'd sold at a profit. - He was always (comparatively) taking a larger risk, despite owning a smaller share of the asset.
Had you sold at even a tiny profit, he'd have turned his initial £0 investment into something (a huge increase) where your initial £50K investment might have been almost the same.0 -
Okay, but look at it this way... If we sold the house on the open market we would get £110,000.
We would then both owe the bank the negative equity of £37,000. So why would he owe £30,600 of this? See what I mean? Im a bit confused.
because u put 50k in the first place leaving a 61/39 split
read post 5 again0 -
Okay, but look at it this way... If we sold the house on the open market we would get £110,000.
We would then both owe the bank the negative equity of £37,000. So why would he owe £30,600 of this? See what I mean? Im a bit confused.
It is because you are splitting the mortgage 50:50 but splitting the house 39:61
So you will both pay back a 50:50 split of the mortgage and hence the negative equity; however you will gain more money from the sale of the house.Now buying our second house:
Accepted offer 16/12/18. Offer accepted 26/1/19. Buyer pulled out 4/2/19. Accepted new offer 13/2/19
FTB: Offer accepted 23/2/2013 Mortgage application 28/2/2013 Valuation: 4/3/2013 Valuation ok 15/3/2013 Mortgage Offer 21/3/2013 Exchange 10/4/2013 Completion 26/4/21030 -
Okay, but look at it this way... If we sold the house on the open market we would get £110,000.
We would then both owe the bank the negative equity of £37,000. So why would he owe £30,600 of this? See what I mean? Im a bit confused.
The logic is that he is responsible for half the mortgage less 39% of the value of the property = £306000
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.2K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.3K Spending & Discounts
- 245.3K Work, Benefits & Business
- 601K Mortgages, Homes & Bills
- 177.5K Life & Family
- 259.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards