Joint mortgage with my brother... help!

bowieben2

Hi! Looking for some advice...

Last year my brother and I purchased a property. Ive been living in the property for the last year and Im now wanting to buy a property with my girlfriend and move out. My brother is going to move in with his girlfriend but I want to sign the whole property over to him so I can get a new mortgage with my girlfriend. We did a lot of work on the house and Ive had it valued and its worth £30k more than what we paid, were going to come to some agreement between ourselves over the equity in the property. But for now I just want to put the whole property and mortgage in his name. He can afford the payments, but I want to avoid as many charges as possible, solicitors, early repayment charges etc...

Whats the best way to do this?

On the other hand, it would suit me if I could keep half the property in my name and have his girlfriend pay me rent, but would I still then be able to get another mortgage with my girlfriend?

Is there a way of turning it into a buy to let mortgage, and those two technically become tennants, which then leaves me free to take out another mortgage (sorry if that sounds clueless, but im not sure how buy to let mortgages work)

Anyway, hope that makes sense, any help is much appreciated!!

Thanks!

Rafter

All depends on the amount of equity you have, and the policy of your lender.

buy to let is currently out of favour so you need a big deposit (>30%) and the rates are higher so wouldn't suggest that route.

Suggest you go see a whole of market mortgage broker and talk through the options. Your current lender may be sympathetic and give you a second mortgage when they can see the income of the girlfriends too, they might do the transfer for a small fee without redeeming the whole mortgage.

You may need a solicitor to draw up an agreement about the equity and to arrange any property transfers. They or an accountant should also be able to advise about any future capital gains tax liability - although that should be easily avoidable.

Good luck

R.

happybroker

the simplest way of doing this is for you and your brother to speak to the existing lender about a "transfer of equity". Your brother will apply for the mortgage in his sole name (or jointly with his girlfirend), the lender will assess this and charge a fee, if they agree you will need a solicitor to carry out the legal work.

This is the quickest and cheapest way of doing it, the bank and a solicitor will know what you are talking about when you mention transfer of equity. If they don't speak to some one else!!

Good luck, sounds like exciting times.

gaborkiraly

hi i have a joint mortgage with my brother and half the property is mine im moving out into a rented property with my fiancee the property im moving out of is on the market weve worked out im entitled to 12k but at the moment my brother is refusing to pay me as i told him i want to be brought out should i seek legal advice

happybroker

gaborkiraly wrote: »

hi i have a joint mortgage with my brother and half the property is mine im moving out into a rented property with my fiancee the property im mving out of is on the market weve worked out im entitled to 12k but at the moment my brother is refusing to pay me as i told him i want to be brought out should i seek legal advice

That's a shame and can be one of the downfalls of this sort of arrangement.

I'm guessing you weren't advised to effect a "deed of trust" which is a shame as that would of formed a written agreement between as to how the proceeds were to be split when the property was sold. If you were then great, show it to your brother.

Do you own the property as joint tennants or tennants in common? If you are tennants in common and own 50% of the property each then the proceeds of sale should be split equally which you solicitor will confirm to your brother. If it's a case of joint tennants then speak to the solicitor who is going to deal with the sale and get his opinion on it.

Worst comes to the worst your brother can't sell the place without your agreement which might well make him think again.

gaborkiraly

i just think im going to get legal advice i hate to do this to him as he is my brother but if he dont pay me the flat is not getting sold without my say so

happybroker

I would tell him this first (family relationship advice isn't my strongest point!!) as speaking to a lawyer will just wind him up further wouldn't it?

trynsave

gaborkiraly wrote: »

hi i have a joint mortgage with my brother and half the property is mine im moving out into a rented property with my fiancee the property im moving out of is on the market weve worked out im entitled to 12k but at the moment my brother is refusing to pay me as i told him i want to be brought out should i seek legal advice

Piggy-backing troll?

If the house is on the market wait until it actually sells and then divide the proceeds. If you were my sibling there would be no way I'd be paying up half the 'equity' in the property before a selling price was actually agreed! Just because it is on the market for a given price it doesn't mean that is the amount that would be realised.

gaborkiraly

but even when he sells hes refusing to pay me my share if he does he said he will only be paying me £50 a month any advice ??

gaborkiraly

im still not getting anywhere with this matter hes saying he cant afford to buy me he hasnt got the money any advice on this matter would be good ??