Selling house with sister

F

frank1001

Registered User
Messages
3
Hi

I need some advise about my situation as its not sustainable. Myself and my sister jointly bought a house in 2007.
Remaining balance is €290,000.
Tracker rate of 1.3%
My sister lives in her own house, and I live here with my gf.

We don't see this as a place we'd like to live long term and my sister would like to get rid of it also.
The house would be valued at ~€250,000, possibly more.

Obviously the tracker is very valuable to us, so would it be possible for me to buy my sister out of her portion of the house and keep the tracker? Then we could sell up and take the tracker with us?

If that isn't possible and we are to sell the house in years time, would myself and my gf need 10% or 20% deposit for ~€300,000 mortgage?
I will not be a first time buyer, but she will be. Both of us will need to go down on the mortgage as we don't earn enough individually.

Thanks
F
 
First of all, as you appreciate, the tracker is extremely valuable. Your share, €145,000 is currently saving you around €4,000 year in interest.

As an investment, it is very profitable. I am sure that the rent is well in excess of the interest paid and other expenses.

You say that it's not the place you would like to live long-term? Would you live in it for the medium term? If you and your GF can buy it from your sister and keep the tracker, it would be a very economical place to live. The interest on €290k would be around €3,800 a year or €300 a month. Your repayments are higher, as they are mostly capital repayments. You would have the NE paid off fairly soon and after that, you would be building up positive equity.

If you and your GF buy a house, you will need a 20% deposit between you, so that means that you need to build up around €60k in the current house unless you have other savings.

You have not mentioned which lender you are with. They do not allow investment mortgages to be ported. But if you lived in the house for a few years, they probably would. You should try to get the house into your own name first, before asking.

If the lender allows you to get the house into your name and your girlfriend's name, you will need to do a written agreement in advance of the deal. She is taking over negative equity, but she will benefit from the tracker. But you need to agree what will happen if you split up.

Brendan
 
Thanks Brendan.

I'm with PTSB and I've lived in the house since it was built 9 years ago. I agree with you, if its possible to buy my sister out and keep the tracker, that would be a very good option.

Although unlikely that the sister will go for that while its in NE.

Might be worth meeting the lender to discuss option.

Thanks for your help.
 
frank1001 said:
I'm with PTSB and I've lived in the house since it was built 9 years ago.
Click to expand...

Sorry, I had misread your post. As the house is your Principal Private Residence, ptsb will allow you to port your tracker.


frank1001 said:
Although unlikely that the sister will go for that while its in NE.
Click to expand...

Sorry, I don't understand what "that" is. You and your GF should be happy to take over the house and the mortgage from your sister without any financial adjustment. The cheap tracker compensates for the Negative Equity.

So my revised suggestions are as follows:
1) Seek your sister's agreement to take over the house and the mortgage without any financial settlement.
Meet with ptsb and seek their agreement for the following:
1) You and your GF get loan approval for €300k (or whatever figure you need.)
2) They allow you and your sister to sell the house and you carry the tracker over the new property in the name of you and your GF.

This would be easier and cheaper than your GF buying out your sister now.

Will you get approval for a Negative Equity mortgage from ptsb?

Have a read of this Key Post.

Analysis of new ptsb tracker mover

You will need 10% of the purchase price in cash i.e. €30k

If you buy a house for €300k, the resultant position will be:

House value: €300k
Less sale of existing house (€250k)
Plus existing mortgage €290k
Less 10% deposit: (€30k)
Resulting mortgage €310k
Loan to Value: 103% which is well within ptsb's guidelines.

Brendan
 
Sorry, I should have clarified.
As it was an "investment" for both my sister and I, and its now in negative equity, I believe we'll both have to take a financial hit if we agree to sell in the short term.
Although I understand your point about taking the house over from my sister without any financial settlement, as having the tracker will offset the NE.

Thanks for your advice.
 
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