Walk away or keep share in house

A

angelmcm

Registered User
Messages
17
hello, if anyone can give me advice I'd appreciate it. This situation is consuming me over past few weeks & don't know what is best route to take.

I have a large house that needed work with another family member. Bought 8 years ago. 250 k plus invested 20 k each doing it up. Here are some of the finer details

Paid 15k deposit
20k refurb
15k lump sums paid off mortgage at various times during last 8 years
Paid half of usual maintainable costs prtb, painting, insurance, tax etc

Income details
Net monthly 2200 public sector
Income history: permanent full time
Partner same

co-purchased with family member. Was single.
Neither of us live there anymore, I'm living with partner in his house 700 each per month into joint account to meet full living expenses inc contribution to his mortgage

Rent - was gettin 650 per month (tenants just moved out)

I contribute 300 per month to cover shortfall & expenses after rental income to investment house

Home loan on co purchased house
Lender: Aib
Amount outstanding: 160 k
Value of home: 150 k
Interest rate: SVR 3.8%
Monthly repayment: 1050
Amount in arrears: 0
Remaining: 27 years

No Other loans and creditors

Other savings and investments
100 k together with husband

Do you expect any lump sums in the medium term future?
Maybe use some saving- unsure

How important is retaining the family home to you?
We do have option of moving into this investment property as much larger than current house. Baby on way and need bigger place, we are intending to move regardless. We can rent out husbands house which is very small, definitely not suitable for family. investment house will need 15/20k revamp to make it into a comfortable family home to a standard I would be happy to live in. Other family member willing to pay half of this refurb. Unwilling to allow us take over mortgage & make this our home

Family member also willing to give me 10k and take over my half mortgage though & I walk away but he won't do same. They are in a better financial position than me and would have no trouble taking over mortgage & getting approval from bank.

Tenants just moved out - house in absoute mess/ total disrepair 5k to get it to rental standard.
Is this house just becoming a money pit??
But find it hard to walk away with all I have invested over past 8 yrs. Need family home. Should I just do up & move into investment property and still be tied to other family member. Or cut losses take his 10k offer & use saving to buy house with my husband & cut ties with family member.

my husbands house is an affordable house so can't sell Under council conditions. Council will allow us to rent under circumstances and rent will cover mortgage.

Any advice appreciated. Thank you.
 
angelmcm said:
Amount outstanding: 160 k
Value of home: 150 k
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These are the only two relevant figures. What it is worth today and what you owe today.

The history is simply not financially relevant. You are in negative equity and your family member is prepared to buy you out of negative equity.

You go from being worth -€5k to being worth €10k.

Grab it with both hands.



angelmcm said:
This situation is consuming me over past few weeks
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If you "rent" this house from your family member, you will be arguing about the costs of refurbishment and the amount of the rent etc. It's just not worth the hassle.

angelmcm said:
We can rent out husbands house which is very small, definitely not suitable for family.
Click to expand...

When you say it's not suitable, do you mean that it's not ideal? It sounds as if it's a very good deal for you and means that you will get accommodation very cheaply. This will allow you to build up your savings to buy the house you need it, when you need it.

Brendan
 
Thanks very much for your reply Brendan,
Husbands house not suitable as in space wise. Physically couldn't fit a cot in bedroom never mind a buggy and all else that comes with a family. It's a one bed bachelor pad. Struggling to fit his bike in hall way. He cycles to work needs bike. No garden, no parking and no room to expand.

With regard what you say about the only two fingers that matter is the 160 and 150 k- completely see why you say that but can't ignore cash esp lump sum amounts paid into property already. To be honest 10 k being offered is really repaying the 10 k I paid off mortgage in January. Only have 10 k negative equity because of investments made...

We are steadingly building up our savings keeping both houses..finding it very hard to just walk away
 
Brendan Burgess said:
You go from being worth -€5k to being worth €10k.

Grab it with both hands.
Click to expand...

As well as being 300/month better off cash flow wise if I read ur post right.

angelmcm said:
I contribute 300 per month to cover shortfall & expenses after rental income to investment house
Click to expand...

Grab it and walk away and focus on the future as this 300 will be more if u have no tenant and have to fix it up while paying the overhead which seems to be bank 1050 + u 300 + bro 300 = 1650 and rent was 650 so shortfall looks like 1000/month before tenants walked out and now is the full 1,650

I know what you mean by last 8 years but its gone, so walk away now.
 
angelmcm said:
To be honest 10 k being offered is really repaying the 10 k I paid off mortgage in January.
Click to expand...

From your relatives point of view, they have also sunk €10k in it and now they are sinking more into it.

Grab it quickly before they change their mind.

We all make big purchases which don't work out. You are getting out light enough. Others are stuck in joint mortgages in big negative equity where the joint owner is paying nothing - look at his unfortunate woman:

 
update: plot thickens.... May need to add more lyrics to that song.

Bank will not allow other family member to take over mortgage because it's in negative equity and they have put lower value on house that we had it valued at. They value it at 130k

It looks like the shared refurb cost and renting from him option is looking likely.
or he has said we can take over mortgage, he'll walk away and will sign any leagal side deal to get off mortgage once bank allows us to take him off mortgage. We'll have our family home & not loose any of my previous years investment.
This house is ideal for us and def could be a family home.
We are in a position to pay lump sum off 160k mortgage bring it out
Of negative equity. We need to upsize regardless, this option allows us to do that (prob won't get another mortgage as still on this one) and keep most of our savings intact .
Any advice appreciated.
Cheers.
 
Why will they allow him off the mortgage and not you?

If the mortgage is €160k and the property is worth €130k, his share of the negative equity is €15k. That might be the price you have to pay to sort out this mess of joint ownership.

How much do you think it's worth to you?

Brendan
 
They are not allowing him off mortgage he is willing to stay on mortgage on paper with side legal agreement to walk away once the bank does allow him too. We take over the mortgage payments & take over mortgage when legally allowed to do so by bank ie when out of negative equity

It has more than just financial worth to us as it will sort out our living arrangements, getting a family home that we need.
Save us bothering to find another he's, EA fees, legal etc
We know this house like it & see potential to do it up to our liking.
 
You say in your Original post you have 100k in savings. If you offer even half of this to the bank they should agree to take your brother/family member off the mortgage (and hence the deeds) in exchange for this lump sum payment. This is what I did to sort out my joint mortgage.
 
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