Stuck with two mortgages?

A reader from Sutton is planning to move up the property ladder, but she is worried about facing paying two mortgages as she waits for her housemate to buy her share of their current home.

Tony Davis, myfinances.co.uk mortgage expert from Mortgage Meadow, takes her through the problem.

Candida from Sutton asks:

I currently own 50 per cent of a property with a friend, we have a joint mortgage. We decided we want to go our separate ways.

I have found a place I like, my offer has been accepted and I have a mortgage arranged. My friend will buy my 50 per cent of the property but she is waiting on an inheritance she will receive in days/weeks.

If my purchase on my new place completes before she buys my 50 per cent share will I be liable to pay both my new mortgage and my joint mortgage with her? If so and I cannot make the repayments on my joint mortgage what would happen?

Thanks, I just want to make sure I know exactly the situation so that I can see if I can delay the completion on my new property if I need to.

Tony replies:

Until your equity in the current property has been bought and your name removed from the mortgage contract you remain jointly and severally liable for the mortgage and the payments on that property.

This means that you have an obligation to make sure that the payments are maintained, as such you should not complete on the purchase of your new home until the sale of your share of the old property has completed.

If you have a question for Tony, go to the myfinances.co.uk Ask the Mortgage Expert section.

Or for more information or mortgage advice go to Mortgage Meadow.

Mortgage Meadow is an independent mortgage broker and is authorised and regulated by the Financial Services Authority.