I own 50% of a house, the other partner wants to sell. I am looking at buying her share. The mortgage amount is $500,000 she is willing to sell the house at $350,000 because house prices have decreased. Can she sell the house at under the mortgage amount? Will the banks lend her the amount needed to cover her share of the decrease with no asset to show?
Hi Jane, any transaction will require both of your consent/signatures on various documents, ie. contracts, bank documents, etc, so nothing can happen unless you both agree. She will need to prove to the banks that she can service any residual debt she has & just as importantly, she will need to be able to offer the bank's some form of security unless they are prepared to provide some form of unsecured, personal loan, although by the sounds of it, it wont be a small amount, so she may struggle. Good luck..........
Sorry to hear of your current situation.
If the property is in joint names than neither party is unable to sell the property without both parties agreeing to the sale and a contract of sale would have to be signed. If, as you asked, the property was sold for $350,000 and the mortgage on the property was $500,000 then the borrowers would still be liable for the outstanding balance. It is worth noting that if you engaged a real estate agent to sell then you will be incurring costs that will ultimately reduce the net position of the sale.
It is also doubtful a lender would offer such a loan with no asset as security.
I would strongly suggest meeting with an experienced financial adviser or finance broker to go through your financial situation, discuss some options and develop short and long term strategies to help you buy the property.
Your options could include::
• Using the property as an investment property.
• Agree on a sale price with your partner and take over the mortgage repayments until such time you have enough equity to pay them out
There may be other options that may come from a discussion with a finance expert.
I hope things turn out ok, best wishes