My partner and I have about €150,000 in savings. We would like to buy our first home shortly. However, she and her friend have a mortgage which is jointly and severally liable. The negative equity is approximately €130,000 between them/€65,000 each. They are currently trying to sell the property in question in order for them to go their separate ways (we had been told the jointly and severally liable aspect of that mortgage would impede our ability to raise a mortgage and get on with our life as a family). I have never owned a home.
In the event of a sale, the €130,000 will be transferred into a personal loan at the same variable interest rate as the mortgage. We are not sure what we ought to do with our savings, and my partner is a bit anxious that the current bank might make her liable for the lot if she pays off her share of the €130k immediately. What is the smartest way to proceed here? Thank you.