Real Estate - Opting Out of a Join Mortgage

I plan to purchase a house with 2 other individuals. The 3 of us will
pool money together to make the down payment and each mortgage payment.

I plan to opt out of the join mortgage several years later. I will need
the other 2 individuals to refinance the mortgage to pay me back my share
of equity.

My questions:
1) If the other 2 individuals refuse to refinance the mortgage, but I want
my share of equity back, what is my recourse against the refusal?

- note that the 2 of them combined for a 67% stake in the house and can
"vote down" my request to refinance

2) If they do agree to refinance, how do I prove that I have indeed
contributed 1/3 of the downpayment and 1/3 of each mortgage payment?

Thanks.

Helen

Re: Real Estate - Opting Out of a Join Mortgage

In article
<>,
Helen <> wrote:

> I plan to purchase a house with 2 other individuals. The 3 of us will
> pool money together to make the down payment and each mortgage payment.
>
> I plan to opt out of the join mortgage several years later. I will need
> the other 2 individuals to refinance the mortgage to pay me back my share
> of equity.
>
> My questions:
> 1) If the other 2 individuals refuse to refinance the mortgage, but I want
> my share of equity back, what is my recourse against the refusal?
>
> - note that the 2 of them combined for a 67% stake in the house and can
> "vote down" my request to refinance

There really isn't much you can do. About the best option would
be to sell your 1/3, but if you do this as 1 joint mortgage rather
than 3 separate mortgages, the other 2 would still have to sign
off. Even if you simply walk away, and quit-claim deed your
equity to the other 2, you are still on the hook for 100% of the
mortgage payments in the event that they stop paying.

Net-net, this is a monumentally stupid thing to do.

Even if everyone is friendly and plan to do this re-fi, how do
you know that (a) they will qualify for a re-fi, (b) interest
rates haven't gone sky high so it becomes a very bad deal, or
(c) they still want to pay the fees and points required.

Now, consider if one of the 3 gets killed in a car accident.
Now who are your partners? Everyone that was in his will, or
if he/she doesn't have a will, everyone that the judge chooses
to delegate is now your partner.

Dumb, dumb, dumb idea.

> 2) If they do agree to refinance, how do I prove that I have indeed
> contributed 1/3 of the downpayment and 1/3 of each mortgage payment?

Keep detailed records of payments along with check numbers.

-john-

--
============================================================ ==========
John A. Weeks III 952-432-2708
Newave Communications
============================================================ ==========

Re: Real Estate - Opting Out of a Join Mortgage

"Helen" <> wrote in message
news:

>I plan to purchase a house with 2 other individuals. The 3 of us will
> pool money together to make the down payment and each mortgage payment.
>
> I plan to opt out of the join mortgage several years later. I will need
> the other 2 individuals to refinance the mortgage to pay me back my share
> of equity.

It is very, very doubtful if any lender will give you a mortgage under that
arrangement. Even if all three of you have impeccable credit and have lots
of money for a big down payment, it is still doubtful. If you do have enough
money and also perfect credit, then by all means buy your own houses
separately!

Re: Real Estate - Opting Out of a Join Mortgage

"Helen" <> wrote in message
news:
>I plan to purchase a house with 2 other individuals. The 3 of us will
> pool money together to make the down payment and each mortgage payment.
>
> I plan to opt out of the join mortgage several years later. I will need
> the other 2 individuals to refinance the mortgage to pay me back my share
> of equity.
>
> My questions:
> 1) If the other 2 individuals refuse to refinance the mortgage, but I want
> my share of equity back, what is my recourse against the refusal?

If there is no formal partnership agreement that defines the exit of
partners, you can file alawsuit requesting a partition action. The court
will force a sale and each partner will get his/her share.

>
> - note that the 2 of them combined for a 67% stake in the house and can
> "vote down" my request to refinance

It does not matter if any party files a partition action.

>
> 2) If they do agree to refinance, how do I prove that I have indeed
> contributed 1/3 of the downpayment and 1/3 of each mortgage payment?

You keep records.

Having said the above, it appears that you are trying to enter into a
partnership with a hidden investment horizon. Partnership are difficult
enough without hidden agendas at the get-go. It seems to me that the whole
idea is illadvised. I agree with the previous posters. It is not something
you should do.



>
> Thanks.
>
> Helen

Re: Real Estate - Opting Out of a Join Mortgage

"Helen" <> wrote in message
news:
>I plan to purchase a house with 2 other individuals. The 3 of us will
> pool money together to make the down payment and each mortgage
> payment.
>
> I plan to opt out of the join mortgage several years later. I will
> need
> the other 2 individuals to refinance the mortgage to pay me back my
> share
> of equity.
>
> My questions:
> 1) If the other 2 individuals refuse to refinance the mortgage, but I
> want
> my share of equity back, what is my recourse against the refusal?
>
> - note that the 2 of them combined for a 67% stake in the house and
> can
> "vote down" my request to refinance
>
> 2) If they do agree to refinance, how do I prove that I have indeed
> contributed 1/3 of the downpayment and 1/3 of each mortgage payment?
>
> Thanks.
>
> Helen

I guess it depends where you live. In Florida, you can force the sale
with a fairly simple lawsuit. The judge will direct the others to
either buy you out by way of a refinance, or sell the property and
divide the proceeds. If they can't or won't do the refinance, they will
have no choice but to sell.

Suppose your parents died and left their house to you and your sister.
You wanted to cash out but your sister wanted to keep the place for
herself or a rental. If she doesn't have the cash to buy you out and
can't get refinanced, the court will order the property sold. If your
sister refuses to sign the deed, the judge will sign it for her. He may
even hold her in contempt. It happens all the time.