Selling Half our house to my brother

[cullenswood]

Hi,

We want to move house but the way the market is at the moment figure it could take a long time to sell. My brother is interested in getting on the property market and mentioned he might be interested in buying half our house....we could then rent it out and myself and the wife buy another one.

What would be the best way to work all this out. Mortgage currently in myself and my wifes name. c200K left on it. House currently worth around 270k. We have lived in it for 4 years. Would we have to get a mortgage in the three of our names? If so then my brother would obviously owe us money...where does this come from, does he get another mortgage? I can't really figure out how it would all work out.
The rent should cover most of the mortgage payments.

Any advice or basic tips on how all this works gratefully accepted.

 

[cullenswood]

Still trying to figure out what is the best way to go about this? Anyone got any ideas?

 

[niceoneted]

If he is intending to buy into half of it he would be buying 135K of interest in your house.It might depend on his and your financial positions as to which is the best way to do this. He might be able to raise a mortgage for 135k and pay you thus you pay 135k off your outstanding mortgage or part thereof. Alternatively you could all re mortgage for the 200k - with all names on mortgage, therefore him taking over 100k of the mortgage and him then also paying you a cash amount of 35k.
Best I could come up with.

 

[PM1234]

If the rent covers the mortgage repayments why do you want to get a third person on the mortgage?

Your brother won't be able to get a mortgage on his own for a share of the property as the security (property) isn't and won't be in his sole name. If there will be three people on the title deeds, then all three will have to be on the mortgage.

Does he have a lump sum to buy into the property? If he does then as above you could take a mortgage in three names for the remaining €200K, he takes over half the mortgage repayment, pays the agreed buy in amount and the deeds are transferred into joint ownership. Depending on his lump sum you could alternatively do this for 1/3 and 2/3 ownership etc.

The lender will have to give their authorisation and will hold all mortgage holders equally liable. Its also important to have an agreement in place for when one of you wants to sell the property.