Mortgage name change

tigs82

My partner lives with his brother in a house they bought over a year ago. Both names are on the mortgage and his brother is the lead name.

However recent family problems have caused his brother to move out and ask me if I am willing to buy out his share of the mortgage and move in. I am willing to do this, however I have no idea if we are able to change his name to mine, how much it will cost or how long it will take.

Can anyone please give me some help and any advice on this matter.
Thank you

feisty1

I have no idea if we are able to change his name to mine? quote
Yr partner's brother would have to consent to being removed
how much it will cost or how long it will take quote..depends on who undertakes to do this & of course you will have to meet criteria to be accepted by lender .......person being removed from title will possibly be looking for his share of equity

tigs82

His brother has asked me to pay him the amount he has paid already for the mortgage, which I have agreed to do.
what criteria would this be? sorry if i sound bit naive but this would be my first mortgage and don't really know what criteria is needed to be accepted.
Thank you

_Andy_

The lender will need to assess your credit history, income, etc., against their criteria.

tigs82

are lenders getting tighter on mortages because of the credit crunch? will i still need a credit check if my boyfriend is on the mortgage aswell and has been paying reguarly for the past 16 months?
I am bit concerned as I have an "average" credit history, meaning some will lend to me and others wont due to my credit history during uni! however i am a full time primary school teacher and have been receiving regular wages for over 8 months

straddie

tigs82 wrote: »

His brother has asked me to pay him the amount he has paid already for the mortgage, which I have agreed to do.

Two things to watch out for here:

1) Make sure interest is factored out of the calculations and that you only pay him for the capital he's paid off. If they only bought the house around a year ago most of their monthly payments would have been made up of interest which he shouldn't expect to recoup; interest is effectively a service charge for borrowing money - you wouldn't pay him for the gas/electricity etc he'd used would you.

2) If the house was bought around a year ago it will almost certainly be worth less than was paid for it. Depending on how big a deposit was put down when it was bought, there isn't likely to be much, if any, equity left in the house. If it was to be sold on the open market they wouldn't almost certainly make a loss. Get the house valued and if it is indeed worth less than was paid for it, you shouldn't have to pay him anything - after all, you are doing him a favour taking it off his hands because you've saved him from making a loss. If there is any equity left in the house, then work out how what percentage of it is his and then offer to pay him that eg if he and your brother have put in the same amount of capital and there is 2k equity then offer him 1k.

Sorry if these seem like no-brainers that you were already conscious of - figured I'd make sure they were pointed out just in case!

tigs82

Thanks for all the advice. despite the common sense advice you have given me Straddie, I think I will have to give him some money towards the house despite him only paying interest. Nothing was put down on the house, it is a 100% mortgage (really not my choice if my partner and I were buying our first house!) but this is all they could get as my partner is self employed. However everyone in the situation thinks its fair I give him any money he has paid towards the mortgage, although i refuse to give him the full amount due to the circumstances and the way it has all come about.
Is there anything legal to say I do not have to pay him anything due to it being only interest, then at least what I am offering will seem generous and I wont enter into a mortgage in too much debt from a loan to pay him off.

sorry if i sound a bit stupid and naive about all this, i have no idea about mortgages really and would like to know all the information possible before i agree to do this.

straddie

Hmmmm you really need to think carefully about this, not only in terms of the agreement you come to with your OH's brother, but whether you're sure you want to go ahead with it in the first place.

A 100% interest only mortgage means that they will currently be sitting on (potentially) substantive losses - I don't know offhand the total percentage decrease in prices over the last year but I believe it's in double digits. So the house will be worth quite a bit less than the mortgage secured on it. If you take on his share of the mortgage you will be locking yourself into a situation that could be difficult to get out of ie you may be stuck there unable to move due to negative equity. You are taking on a big risk whilst he is walking away from it all scot-free. Why should he get a load of your hard-earned cash as well ?! If anything he should be paying you half of the decrease in value as that's how much money you stand to lose on day one - and with prices falling each month the amount will only increase!

Think about it - what are you actually paying him for? All of the money he has paid out has been for interest payments - to rent money off the lender in return for somewhere to live. Like I said before, would you consider paying his gas and electricity bills from the last year? How about his food bills ?! Paying him for the interest is no different!

If they had a 100% interest only mortgage in a rising market then it would be a different matter as they would have some equity in the house which would justify paying him something. I come back to my earlier suggestion - get the house valued and IF the value has gone up (highly unlikely but you never know) then pay him half of the rise or whatever his share is deemed to be. If it's gone down then tell him you won't expect him to make up the loss - that in itself is an act of generousity! If he doesn't see it this way then point out the alternative option - selling the house on the open market which would guarantee a shortfall that he would have to stump up for his share of!

Edit: I forgot to say - do they have any kind of repayment vehicle setup alongside the mortgage? If so, and he's paid into that, then that obviously needs factoring in. Chances are the amount in that would still be less than the decrease in the value of the house, meaning the above logic would still apply.

tigs82

Thank you so much for all this advice, I would've handed over everything to him without knowing all this before.
Is there anything legal wise that states this so I can prove this to him and show him all the information you have given me? If I show him a print out if this I doubt he will believe me as he is obviously looking to make money out of me and will not be happy if I put up a fight about it. They can't sell the house due to a clause on the mortgage which states they can not sell until they have lived there for 2 years, which is another 6 months away. The main problem my OH has now is that due to his brother moving out he can't afford the mortgage on his own and his brother is refusing to pay stating he doesn't live there anymore!
I am not too concerned about getting the mortgage with my OH. Even though it is not ideal and not the type of mortgage I would've got myself into, I do want to live with him and we have been planning getting our own house once he had sold this one.

It is a messy situation and one that needs to be sorted as soon as possible so the morgage payments can be met. Any advice by anyone is wonderful and is really helping me seriously think things through. Thank you so much to everyone who has given me advice so far or will give me more advice. x

tigs82

my OH brother has decided to change his mind and wants me to rent from him for 6 months and then?!?! who knows!|? he seems to be playing lots of gams, not of which are helping my OH. is there anything we can do to either get his brother to sell or pay the mortgage he owes?
thanks you once again

feisty1

IT'S GOOD TO TALK!