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    • Phil1111
    • By Phil1111 5th Dec 17, 1:18 PM
    • 8Posts
    • 0Thanks
    Phil1111
    Brother wants to take out joint mortgage against my will
    • #1
    • 5th Dec 17, 1:18 PM
    Brother wants to take out joint mortgage against my will 5th Dec 17 at 1:18 PM
    Hi all,

    My brother wishes to take a buy to let mortgage out on a house that we have both inherited. The property at the Moment is mortgage free and held in equal shares.

    He wishes to take out 50k and I would have to be a co signer for a mortgage I would not use or want. I would simply be signing the paperwork. As you can imagine this has caused much trouble.

    Question is, is that he has claimed all along that itís risk free for me and his financial advisor has told him it would not affect my borrowing . I cannot see this as being correct ? Am I right?

    Thank you.

    Thanks
Page 2
    • AnotherJoe
    • By AnotherJoe 5th Dec 17, 4:39 PM
    • 7,679 Posts
    • 8,291 Thanks
    AnotherJoe
    What KP said, sell up. Your brothers finances are not your responsibility neither is the tenant. Maybe they would be interested in buying it.

    Don’t sign anything don’t let yourself be bullied into it. Doesn’t sound as if the rental is anyth7ng other than a burden to you. Get rid.
    • Phil1111
    • By Phil1111 5th Dec 17, 4:59 PM
    • 8 Posts
    • 0 Thanks
    Phil1111
    Problem is that Iím happy just renting it out and keeping everything as it is. However unfortunately heís not.

    The moment itís put up for sale the Tennant will
    move out and the house will be empty. Maybe for a couple of years. Who knows? My brother would not bother upkeeping the property either, mowing lawns etc. This will all be left to me.

    We will also have to pay capital gains too.
    • Keep pedalling
    • By Keep pedalling 5th Dec 17, 5:28 PM
    • 4,108 Posts
    • 4,473 Thanks
    Keep pedalling
    Problem is that Iím happy just renting it out and keeping everything as it is. However unfortunately heís not.

    The moment itís put up for sale the Tennant will
    move out and the house will be empty. Maybe for a couple of years. Who knows? My brother would not bother upkeeping the property either, mowing lawns etc. This will all be left to me.

    We will also have to pay capital gains too.
    Originally posted by Phil1111
    How about offering to buy him out?
    • Fireflyaway
    • By Fireflyaway 5th Dec 17, 6:06 PM
    • 1,373 Posts
    • 1,383 Thanks
    Fireflyaway
    I would stick to what your instinct says and don't do it. It might seem like just signing a bit of paper but in reality you are liable to pay it if he defaults and it will damage your credit score.
    My husband and I nearly acted as a guarantor for a family member till we thought about his past behaviour and what the impact would be on us if he did default. We told him no in the nicest possible way and we haven't spoken since!
    In your situation I'd break financial ties soon as possible. It would be a shame to fall out over your late mums house. Sell up and split the proceeds. Yes you might lose some money in tax etc but if you don't what's the long term plan? Then you are both free to do as you please.
    • clairebeth
    • By clairebeth 5th Dec 17, 6:07 PM
    • 141 Posts
    • 53 Thanks
    clairebeth
    Can YOU get a £90k BTL mortgage at 50% ltv? Then pay him the £90k (or whatever the agreed value is). He gets money to sort out his house, you own the whole rental property and get the whole rental income. Pay off the £90k asap and own it outright. Any decisions about renting or selling once you pay him are yours and yours only. Either way, I think you need a solicitor and a financial advisor.
    • Phil1111
    • By Phil1111 5th Dec 17, 7:41 PM
    • 8 Posts
    • 0 Thanks
    Phil1111
    Thank you for all your replies.

    Yes I need to find out about the possibility of a mortgage myself. I donít and canít affiord to overstretch myself over this.
    • clairebeth
    • By clairebeth 6th Dec 17, 1:50 AM
    • 141 Posts
    • 53 Thanks
    clairebeth
    You are absolutely right not to get yourself in a situation that you are uncomfortable with or that is not sustainable. Depending on your rate and term the extra money you will be getting in rental income may cover the repayments, but get advice before you do anything. Would you prefer to just get the £90k lump sum if he can buy you out and investing it some other way? Lots of questions to consider, make sure it's the right choice for you, not your brother or your tenant.
    • getmore4less
    • By getmore4less 6th Dec 17, 5:30 AM
    • 30,848 Posts
    • 18,451 Thanks
    getmore4less
    Thank you for all your replies.

    Yes I need to find out about the possibility of a mortgage myself. I don’t and can’t affiord to overstretch myself over this.
    Originally posted by Phil1111
    The letting business might stack up with debt.
    the tax position is changing so that needs considering.

    if selling is a tough(time) option then continuing the let may be the lowest loss option.

    if we work on needing £90k(maybe squeeze him down on value) to buy him out and a bit more to act as a cash flow buffer lets go for £100k total.

    Numbers look a bit like this

    £100k @ 2.4% repayment over various terms.
    10 £938
    15 £662
    20 £525
    25 £443
    30 £390
    IO £200

    You should be able to claim tax relief up to full values at the time it was let if you have other debt

    if we work with tax 20% on the full £600 after that and interest you have £280 to top up the maintenance pot or pay off capital. some will go(gas cert) even if you never have to fix anything

    looking at a 30y loan on that cashflow and manage the cost down as much as possible.

    if you don't need the cash buffer take 10% of the mortgage costs might be able to make 25y term work but very tight.

    With £600pm rent and depending on the yields for the area you are looking at investors paying around £150k max for the place the yield is just not there.
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