Can you join with a friend to go half-ers on a mortgage?

ACG

fireballpaul said:

Newbie_John said:

With a friend, yes totally fine but.. what you're suggesting is that a friend will live somewhere else and that gets tricky - for them it will be another property - higher mortgage rates, stamp duty etc. it may all add up.

And also the main question - what happens if you want to move out, they want their money back, property loses on value and will be worth £80k, they get into massive debts and you may be forced to sell.. 

Yes the friend already has his own house in order and can stay put apart from visiting- this would be them contributing to to half the new house and owning it.     

If things go wrong would it not just be a foreclosure like any other situation ( lose the house, some money refunded etc..)

This is the question isnt it...
Will there be equity? House prices are likely to stay pretty stagnant for a while I imagine. 
How would your mate feel about that? If it was repossessed (not foreclosed), by the time everyone takes their cut and it sells at a loss, he may lose money...

As I said, treat it like a business decision. Have the horrible conversations now and then once you go into it, you know it wont come back to bite your friendship (or at least shouldnt). My view is that you never mix business with pleasure, but that doesnt mean it cant work. 

fireballpaul

ACG said:

fireballpaul said:

Newbie_John said:

With a friend, yes totally fine but.. what you're suggesting is that a friend will live somewhere else and that gets tricky - for them it will be another property - higher mortgage rates, stamp duty etc. it may all add up.

And also the main question - what happens if you want to move out, they want their money back, property loses on value and will be worth £80k, they get into massive debts and you may be forced to sell.. 

Yes the friend already has his own house in order and can stay put apart from visiting- this would be them contributing to to half the new house and owning it.     

If things go wrong would it not just be a foreclosure like any other situation ( lose the house, some money refunded etc..)

This is the question isnt it...
Will there be equity? House prices are likely to stay pretty stagnant for a while I imagine. 
How would your mate feel about that? If it was repossessed (not foreclosed), by the time everyone takes their cut and it sells at a loss, he may lose money...

As I said, treat it like a business decision. Have the horrible conversations now and then once you go into it, you know it wont come back to bite your friendship (or at least shouldnt). My view is that you never mix business with pleasure, but that doesnt mean it cant work. 

Thanks.  Yea well could be the friend wants to take a punt or calculated risk, (i'm not a stranger and I can't exactly run away/sell if living in the property)

Could be an exciting adventure ahead

fireballpaul

user1977 said:

fireballpaul said:

Newbie_John said:

With a friend, yes totally fine but.. what you're suggesting is that a friend will live somewhere else and that gets tricky - for them it will be another property - higher mortgage rates, stamp duty etc. it may all add up.

And also the main question - what happens if you want to move out, they want their money back, property loses on value and will be worth £80k, they get into massive debts and you may be forced to sell.. 

If things go wrong would it not just be a foreclosure like any other situation

"Foreclosure" is a (usually American) term referring to a mortgage lender repossessing, not joint owners "splitting up".

So in Foreclosure they got their money back?

sheramber

What deposit is each paying?

user1977

fireballpaul said:

user1977 said:

fireballpaul said:

Newbie_John said:

With a friend, yes totally fine but.. what you're suggesting is that a friend will live somewhere else and that gets tricky - for them it will be another property - higher mortgage rates, stamp duty etc. it may all add up.

And also the main question - what happens if you want to move out, they want their money back, property loses on value and will be worth £80k, they get into massive debts and you may be forced to sell.. 

If things go wrong would it not just be a foreclosure like any other situation

"Foreclosure" is a (usually American) term referring to a mortgage lender repossessing, not joint owners "splitting up".

So in Foreclosure they got their money back?

I'm not sure what you mean. A mortgage lender who repossesses then sells the property. Whether or not they get their money back depends on how much was owed (including all the costs of repossession etc) and how much they sell for.

fireballpaul

user1977 said:

fireballpaul said:

user1977 said:

fireballpaul said:

Newbie_John said:

With a friend, yes totally fine but.. what you're suggesting is that a friend will live somewhere else and that gets tricky - for them it will be another property - higher mortgage rates, stamp duty etc. it may all add up.

And also the main question - what happens if you want to move out, they want their money back, property loses on value and will be worth £80k, they get into massive debts and you may be forced to sell.. 

If things go wrong would it not just be a foreclosure like any other situation

"Foreclosure" is a (usually American) term referring to a mortgage lender repossessing, not joint owners "splitting up".

So in Foreclosure they got their money back?

I'm not sure what you mean. A mortgage lender who repossesses then sells the property. Whether or not they get their money back depends on how much was owed (including all the costs of repossession etc) and how much they sell for.

I mean in a foreclosure they still give the person SOME money back is that right?  They don't just take the house and all the payments made so far.

user1977

fireballpaul said:

user1977 said:

fireballpaul said:

user1977 said:

fireballpaul said:

Newbie_John said:

With a friend, yes totally fine but.. what you're suggesting is that a friend will live somewhere else and that gets tricky - for them it will be another property - higher mortgage rates, stamp duty etc. it may all add up.

And also the main question - what happens if you want to move out, they want their money back, property loses on value and will be worth £80k, they get into massive debts and you may be forced to sell.. 

If things go wrong would it not just be a foreclosure like any other situation

"Foreclosure" is a (usually American) term referring to a mortgage lender repossessing, not joint owners "splitting up".

So in Foreclosure they got their money back?

I'm not sure what you mean. A mortgage lender who repossesses then sells the property. Whether or not they get their money back depends on how much was owed (including all the costs of repossession etc) and how much they sell for.

I mean in a foreclosure they still give the person SOME money back is that right?  They don't just take the house and all the payments made so far.

The borrower gets money back if there is anything left for them after the lender has accounted for the loan balance due plus the accrued interest and costs. But if there was a significant amount of equity, it's more likely that the borrower could have sorted out a sale by themselves rather than leaving it to be repossessed.

fireballpaul

user1977 said:

fireballpaul said:

user1977 said:

fireballpaul said:

user1977 said:

fireballpaul said:

Newbie_John said:

With a friend, yes totally fine but.. what you're suggesting is that a friend will live somewhere else and that gets tricky - for them it will be another property - higher mortgage rates, stamp duty etc. it may all add up.

And also the main question - what happens if you want to move out, they want their money back, property loses on value and will be worth £80k, they get into massive debts and you may be forced to sell.. 

If things go wrong would it not just be a foreclosure like any other situation

"Foreclosure" is a (usually American) term referring to a mortgage lender repossessing, not joint owners "splitting up".

So in Foreclosure they got their money back?

I'm not sure what you mean. A mortgage lender who repossesses then sells the property. Whether or not they get their money back depends on how much was owed (including all the costs of repossession etc) and how much they sell for.

I mean in a foreclosure they still give the person SOME money back is that right?  They don't just take the house and all the payments made so far.

The borrower gets money back if there is anything left for them after the lender has accounted for the loan balance due plus the accrued interest and costs. But if there was a significant amount of equity, it's more likely that the borrower could have sorted out a sale by themselves rather than leaving it to be repossessed.

Thanks. So the borrower (ex mortgage payer) gets the bulk of it back if there is plenty left?

user1977

fireballpaul said:

user1977 said:

fireballpaul said:

user1977 said:

fireballpaul said:

user1977 said:

fireballpaul said:

Newbie_John said:

With a friend, yes totally fine but.. what you're suggesting is that a friend will live somewhere else and that gets tricky - for them it will be another property - higher mortgage rates, stamp duty etc. it may all add up.

And also the main question - what happens if you want to move out, they want their money back, property loses on value and will be worth £80k, they get into massive debts and you may be forced to sell.. 

If things go wrong would it not just be a foreclosure like any other situation

"Foreclosure" is a (usually American) term referring to a mortgage lender repossessing, not joint owners "splitting up".

So in Foreclosure they got their money back?

I'm not sure what you mean. A mortgage lender who repossesses then sells the property. Whether or not they get their money back depends on how much was owed (including all the costs of repossession etc) and how much they sell for.

I mean in a foreclosure they still give the person SOME money back is that right?  They don't just take the house and all the payments made so far.

The borrower gets money back if there is anything left for them after the lender has accounted for the loan balance due plus the accrued interest and costs. But if there was a significant amount of equity, it's more likely that the borrower could have sorted out a sale by themselves rather than leaving it to be repossessed.

Thanks. So the borrower (ex mortgage payer) gets the bulk of it back if there is plenty left?

They get whatever is left, if anything. It's unlikely the surplus is going to be "the bulk of it" because if you've got (say) a house worth £200k and a mortgage of £100k and you were having financial trouble, you'd easily sell it quickly yourself rather than allow it to be repossessed. The norm for repossessions is that there's a shortfall and the borrower still has something owed to the lender.

fireballpaul

user1977 said:

fireballpaul said:

user1977 said:

fireballpaul said:

user1977 said:

fireballpaul said:

user1977 said:

fireballpaul said:

Newbie_John said:

With a friend, yes totally fine but.. what you're suggesting is that a friend will live somewhere else and that gets tricky - for them it will be another property - higher mortgage rates, stamp duty etc. it may all add up.

And also the main question - what happens if you want to move out, they want their money back, property loses on value and will be worth £80k, they get into massive debts and you may be forced to sell.. 

If things go wrong would it not just be a foreclosure like any other situation

"Foreclosure" is a (usually American) term referring to a mortgage lender repossessing, not joint owners "splitting up".

So in Foreclosure they got their money back?

I'm not sure what you mean. A mortgage lender who repossesses then sells the property. Whether or not they get their money back depends on how much was owed (including all the costs of repossession etc) and how much they sell for.

I mean in a foreclosure they still give the person SOME money back is that right?  They don't just take the house and all the payments made so far.

The borrower gets money back if there is anything left for them after the lender has accounted for the loan balance due plus the accrued interest and costs. But if there was a significant amount of equity, it's more likely that the borrower could have sorted out a sale by themselves rather than leaving it to be repossessed.

Thanks. So the borrower (ex mortgage payer) gets the bulk of it back if there is plenty left?

They get whatever is left, if anything. It's unlikely the surplus is going to be "the bulk of it" because if you've got (say) a house worth £200k and a mortgage of £100k and you were having financial trouble, you'd easily sell it quickly yourself rather than allow it to be repossessed. The norm for repossessions is that there's a shortfall and the borrower still has something owed to the lender.

Thanks.  I just heard of story of someone who got about £75k back after a house deal collapsed or repossessed