Messy house ownership situation!
Discussion
This is a messy scenario, but just wanted to see if there’s anything to be wary of for the following (it’s not me but a close friend):
2 people buy a house in summer 2008 (peak market) – person A puts in 10k deposit, person B puts in nothing – both names on mortgage and no legal document discussing the unequal deposit contribution.
They live in it for a few years jointly contributing to the mortgage, however person B spends a bit of money/time doing DIY etc.
Person A moves out, and Person B lives there alone for a year paying the mortgage on their own, whilst doing various improvements to the house at their own expense (probably 1k on materials).
Person B believes they should pay Person A back half of the deposit morally, but doesn’t have the cash.
The house is in slightly negative equity (after transaction costs), and Person B wants to move on, but they are unable to sell or even remortgage (LTV too high) – so consider renting it out for a while, which would cover the majority of the mortgage but leave a small excess to pay jointly.
Person A would like to move back in with Person C, but they are unable to afford the whole mortgage payment on their own (mortgage now on SVR).
Person B considers ‘renting’ them the house at market rental rate, and then paying half of the excess to top up the mortgage until such time as a decision is made on what to do with the house.
Person B is planning to move abroad for a few years, so doing this gets them out of the house commitment quickly (albeit with a small monthly amount to pay).
It’s a messy one, any pitfalls in Person B’s plan?
2 people buy a house in summer 2008 (peak market) – person A puts in 10k deposit, person B puts in nothing – both names on mortgage and no legal document discussing the unequal deposit contribution.
They live in it for a few years jointly contributing to the mortgage, however person B spends a bit of money/time doing DIY etc.
Person A moves out, and Person B lives there alone for a year paying the mortgage on their own, whilst doing various improvements to the house at their own expense (probably 1k on materials).
Person B believes they should pay Person A back half of the deposit morally, but doesn’t have the cash.
The house is in slightly negative equity (after transaction costs), and Person B wants to move on, but they are unable to sell or even remortgage (LTV too high) – so consider renting it out for a while, which would cover the majority of the mortgage but leave a small excess to pay jointly.
Person A would like to move back in with Person C, but they are unable to afford the whole mortgage payment on their own (mortgage now on SVR).
Person B considers ‘renting’ them the house at market rental rate, and then paying half of the excess to top up the mortgage until such time as a decision is made on what to do with the house.
Person B is planning to move abroad for a few years, so doing this gets them out of the house commitment quickly (albeit with a small monthly amount to pay).
It’s a messy one, any pitfalls in Person B’s plan?
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