Taken Over Payments Of Mortgage

CTT_2

I am presently buying a property with a friend who has decided to move out and rent with his partner. He is agreeable to leaving his equity in the house and I make the repayments on my own. This is not a problems but need advise on what I should do so I can show I have been making the payments when it comes to eventually selling the house. Also I need to establish what his share would be in the house. Any advice greatly appreciated.

Charlton_Taz

I would get some kind of contract drawn up between yourselves to be honest. If you are making all the payments to the mortgage and general up-keep of the house it wouldn't be fair if at the end of it you only get the % of the equity you have put down now. How you work that out is up to both of you, but I would personally get advice from a solicitor because if something went wrong (you never know!!) you don't want to be left horribly out of pocket. You also need to decide what would happen of he decided tomorrow he wanted to sell his 'portion'...how would that affect you?

kamaran

Your roughly about 50% ownership each at the moment. I think a fair way to do it would be:

Get a few valuations, work out what the property is worth now. What Equity have you gained since purchase? Say you bought it for 100K and its now worth 200K so you have made 50K each + 10K (5K each) from mortgage repayment = 55K each.

From this point forward the remaining equity should be yours and therefore if you ever choose to sell, your friends share would be worth 55K and yours would be the rest Its very important to put a firm agreement in place with a solicitor now or it could turn nasty later.

Debt_Free_Chick

CTT - what you are proposing is a bad idea, as has already been suggested. For one, you will end up paying for more than 50% of the value, but you won't be entitled to it (already mentioned).

It's not a good idea for your friend either. If you were to default on the mortgage then they would be pursued for the full amount - and they're not even living in the property.

You really do need a "clean slate" from now on so that if you're paying the mortgage and living in the property, then you actually get to own it!

As already suggested, you need a fair value for the property as of now, deduct the outstanding mortgage and your friend gets half. Suggest you also split any related costs 50:50 too e.g. valuation, solicitors costs etc.

You then need to increase the mortgage to release the cash to pay your friend their half. Clean break and no misunderstanding to bite you on the bum in the future

garysletters

I agree with debt free chick.
i think Kamaran's idea could also cause a problem for your friend as he would then have £x (say £55K as in the example, although by the sounds of it there will be no increase as you are just buying) tied up in your house which he would not be able to get at. His stake could be earning interest or go towards buying another house.
Far better to pay off your friend what he is due from the house via a remortgage, if this is possible. Obviously, this may not be possible due to larger repayments for you solely, so the best bet may be to see a solicitor.

however, what exactly do you mean "I am presently buying......but he has decided to move out???
Have you bought it yet???
do you both live in it???
Has he put any money into it yet???

CTT_2

Thanks to everyone for their input and I have decided to sell the property and buy again on my own.

kamaran

Probably for the best - a clean break will suit everyone and avoid the potential of disagreements in the future.

Good luck with your move!