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Hello,
I have some queries around mortgage accountability on joint agreements.
A very good friend of mine entered in to a joint mortgage with his partner (not married) nearly two years ago, about 6 months ago however she chose to separate from him. There was no particular grievance, she just wanted different things.
He wanted to keep the house as he'd made a very considerable effort to renovate it over the past 18 months, so he approached the bank to see if he could buy her out. He had the funds for a buy out but the bank wouldn't allow him to continue to hold the mortgage alone as his income wasn't sufficient. So they then jointly agreed to sell the property as it was the only viable option (both agreed renting it out was not an option). At this time his partner chose to leave the property and move in with her parents whilst he stayed. Staying was his only option really, it was close to his work, they had pets that he cared for and wanted to keep and he had nowhere else to go. So they agreed that they would both pay their half of the mortgage but that he would obviously be paying for all utilities and other costs on his own.
The property was put up on the market above what they'd paid originally, to take all of the work and materials that had gone in to property in to account, the price was validated by numerous estate agents and the bank itself. The property received quite a bit of interest and viewings but no offers so after a few months his partner started putting pressure on him to drop the price for a quick sale. He reluctantly agreed to do so and dropped the price significantly, almost back to the original price they'd paid for it. More time went by and the property still hadn't sold (it's now been 6 months which in the current climate isn't that bad, I recently myself had to wait 8 months to sell my own house).
His ex-partner's behaviour has now become very aggressive and she has sent him a formal letter stating the following:
- As of the end of this month she will not be paying ANY money at all towards the mortgage.
- She demands that he drop the price significantly again which will take it well below their original buy price.
- She states that she is entitled to rent payments from him as she is no longer living in the property (she is living at home rent free)
- She states that if she has to let the house be repossessed by the bank so be it (this would prevent either of them attaining a mortgage in the future i'm sure so is surely nonsense)
To be clear, the change in behaviour was very sudden and they have no contact at all outside of discussions concerning the house so this wasn't some kind of emotional response to an argument.
Taking the above into consideration I went with my friend to the bank for one last ask and to see if I could enter on to the mortgage without actually living in the property, this was refused and they stated I would have to live in the property to do so which is not an option for me. I can offer him a capital injection but not half of what he'd need on top of buying her out.
My friend now feels that he is effectively being forced to sell a house he does not want to sell for a price that means he will lose tens of thousands of pounds. His other option being to pay the mortgage alone, all the time growing both his and her equity in the property.
Has anyone had any experience with these situations before? I suggested that he propose an agreement with her along the lines of "I will reduce the house price by X if you agree that as of today any equity growth is solely mine as you are no longer contributing in any capacity to the mortgage", is this realistic?
Appreciate any help that can be offered.
Best regards,
J.
I have some queries around mortgage accountability on joint agreements.
A very good friend of mine entered in to a joint mortgage with his partner (not married) nearly two years ago, about 6 months ago however she chose to separate from him. There was no particular grievance, she just wanted different things.
He wanted to keep the house as he'd made a very considerable effort to renovate it over the past 18 months, so he approached the bank to see if he could buy her out. He had the funds for a buy out but the bank wouldn't allow him to continue to hold the mortgage alone as his income wasn't sufficient. So they then jointly agreed to sell the property as it was the only viable option (both agreed renting it out was not an option). At this time his partner chose to leave the property and move in with her parents whilst he stayed. Staying was his only option really, it was close to his work, they had pets that he cared for and wanted to keep and he had nowhere else to go. So they agreed that they would both pay their half of the mortgage but that he would obviously be paying for all utilities and other costs on his own.
The property was put up on the market above what they'd paid originally, to take all of the work and materials that had gone in to property in to account, the price was validated by numerous estate agents and the bank itself. The property received quite a bit of interest and viewings but no offers so after a few months his partner started putting pressure on him to drop the price for a quick sale. He reluctantly agreed to do so and dropped the price significantly, almost back to the original price they'd paid for it. More time went by and the property still hadn't sold (it's now been 6 months which in the current climate isn't that bad, I recently myself had to wait 8 months to sell my own house).
His ex-partner's behaviour has now become very aggressive and she has sent him a formal letter stating the following:
- As of the end of this month she will not be paying ANY money at all towards the mortgage.
- She demands that he drop the price significantly again which will take it well below their original buy price.
- She states that she is entitled to rent payments from him as she is no longer living in the property (she is living at home rent free)
- She states that if she has to let the house be repossessed by the bank so be it (this would prevent either of them attaining a mortgage in the future i'm sure so is surely nonsense)
To be clear, the change in behaviour was very sudden and they have no contact at all outside of discussions concerning the house so this wasn't some kind of emotional response to an argument.
Taking the above into consideration I went with my friend to the bank for one last ask and to see if I could enter on to the mortgage without actually living in the property, this was refused and they stated I would have to live in the property to do so which is not an option for me. I can offer him a capital injection but not half of what he'd need on top of buying her out.
My friend now feels that he is effectively being forced to sell a house he does not want to sell for a price that means he will lose tens of thousands of pounds. His other option being to pay the mortgage alone, all the time growing both his and her equity in the property.
Has anyone had any experience with these situations before? I suggested that he propose an agreement with her along the lines of "I will reduce the house price by X if you agree that as of today any equity growth is solely mine as you are no longer contributing in any capacity to the mortgage", is this realistic?
Appreciate any help that can be offered.
Best regards,
J.
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