Buying brother out of shared house

R

Rosru

Guest
My brother and I bought a house together 5 years ago and to date have paid in equally to mortgage, deposit, expenses etc. We are currently letting the house out and supplementing the rent to pay mortgage. We have agreed that I will now buy him out but don't know how to go about this. Is it a standard sale procedure? Do we need a valuation for mortgage provider? Does it make sense for me to refinance with same mortgage provider (EBS) or should I look at moving new increased mortgage to a different provider? How do we work out how much I owe my brother after we take into account outstanding mortgage, appreciation in value etc. Apologies if these questions sound naive but we would like a pointer on where to start. Our relationship is very good and we don't want either one of us to lose out. Thanks in advance.
 
First of all you need to get the mortgage approval for the whole of the mortgage, with out that you cant go anywhere. I would re-finance with your current lender, they can see your payment history if they refuse then try else where. You dont state you current income or any other out goings and not to be negative but a post on here a few weeks ago......married couple joint income of 95k no other outstanding debts were refused a mortgage of 250k ( i think it was 200 and something anyway ) they wern't just refused by one lender either.

I think your brother is losing out.... why is he selling now? House prices are way down....good for you bad for him....anyway.

In figuring out how much you would need to buy your brother out is going to be tricky, are you going to take into account the money you put into furnishing the house any repairs ect the money that he has paid towards the mortgage so far? It's not just about what value is left in the house after you take away the outstanding mortgage. Are you going to split the legal fees ect. Did you both put half into the deposit?

The simple way is to imagine you are selling the house, you sell the house for 300k and there's 200k outstanding on the mortgage. Say 10k for legal fees and anything else so you're left with 90k. You would both get 45k So to buy him out you would need to give him 45k. Now thats a very simple way but it wont just come down to that.
 
samanthajane, Thank you very much for your reply. Reason he is selling is that house is down the country and he is working and living in Dublin. He is renting but as you say with prices coming down would like to buy now in Dublin and needs deposit etc.Do you know whether we will be able to use just one solicitor as it is amicable and we just want to transfer house to my name- we are happy that we will agree on what's already paid in etc.
 
Best way to find out is just to phone and ask your solicitor, i dont see why there would be a problem, like you said you get on well have no intentions of trying to screw each other, but if anything were to happen down the line about the house and you did have a falling out, the solicitor wouldn't be able to represent you both.
 
Rosru said:
Do you know whether we will be able to use just one solicitor as it is amicable and we just want to transfer house to my name- we are happy that we will agree on what's already paid in etc.
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I think any solicitor worth his salt will refuse to represent both of you. If you ask your solicitor he will probably be able to recommend another firm who he does business with frequently. This will help make things easier, and it is the way things worked for me when I did a buy out.
 
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