Mortgage with another person - can one party insist on a sale?

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butlertom1982

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Hi all, First of all many thanks for any advice given

I bought a house with a friend of mine in 2007 as an investment. Both of us had houses at the time of purchase. We have been paying principle and interest on the investment property and the mortgage is up to date (the payments are killing us as the rent now only covers less than half of the mortgage payments) . Both of our first houses are also in negative equity but are up to date on mortgage payments. All our mortgages are with AIB. The house we bought in 2007 is 90k in negative equity. I bought a small 2 bed house in Dublin city in 2002 but i have since married and now have 2 very young children. I have tried to stay in the house as long as possible but is is now way to small for my family and i need to move however i can not get a mortgage due to the house bought in 2007 .

My question is can one party on a mortgage elect to sell the property If the property is in negative equity. if the party wanting to sell give first refusal to by the property at market value then pay of the remain negative equity. Or can one party just say I want to sell it I now want to put it up for sale.

Thanks for any advice

Tom
 
The property is jointly owned (i.e. a joint tenancy rather than tenancy in common). As such one party cannot make a decision to sell without the co-operation of the other party. Negative equity has no bearing on this. Ideally you should reach a mutual agreement on how to progress from here as any confrontation is likely to lead to further expense and be a long and difficult process. Perhaps the best solution is to discuss a solution with the bank where the property is placed on the market and the resultant negative equity is divided equally.
 
Hi butler

Are you sure that selling the investment property would solve your problem of trading up?

Are you on a cheap tracker on the investment property? If so, it's a good investment as the rent exceeds the interest payment comfortably. What does your joint owner think? Could he take over the property and the mortgage on his own?

If you can't buy another property, then you will have to rent out your current home and rent a bigger house somewhere else.

Brendan
 
Many thanks for the comments. Yes the property is on very cheap tracker. Brendan can I ask why its a good investment. Its costs 400 per month or 800 for both of us to pay principle and interest. the house is only worth 130000 and the mortgage outstanding is about 220000.

I dont think the house is going to rise to 220000 in the next 10 years. so it will cost me 48000 over 10 years.

I cannot get my head around it being a good investment. It turned out to be a terrible investment given the price drop.
 
It's a good investment provided that you take the point that you will need to pay the full amount back and that you can live with the repayment structure for the duration of the remaining term. The negative equity only becomes an issue once you sell the property! Factors like location and recent changes in the value of comparable properties should be factored into any decision you make. Selling the property will not alleviate your cash-flow problems as the bank will need you to pay off the residual debt over a relatively low time period. There is no easy solution here and you should seek independent financial advice before making any decision!
 
One party can take the matter to court and request that the judge force the sale. That was the advice given to me by a solicitor.
 
McStuffins said:
One party can take the matter to court and request that the judge force the sale. That was the advice given to me by a solicitor.
Click to expand...

He can indeed do this but that will not solve the NE. And it most certainly will not solve it if both parties don't have any money. Best solution is the banks agreement to a sale as per poster 44brendan.
 
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