Joint mortgage with brother for sister to rent

kimmi

Hi
I'm just looking for a little bit of advice, hope someone can help.

My sister was recently re-housed 50 miles away with her 3 children after problems with her boyfriend. None of them have settled there and she has no money to move. She's put her name down to be transferrred closer to other family, but being on DSS she's having problems renting anywhere privately.

Both my brother and I live in tied accomodation with our jobs. Brother earns around £14K pa plus approx £4K in overtime, but pays no rent or council tax on his house. I live with my husband (salaries of £14K and £24K) but pay all bills - rent is around £60 per week, c tax £1100 pa.

We're thinking of pooling our resources and buying a house which sister can live in. Hopefully once her youngest is in school she'll then be able to get off DSS and find a job. I've got 2 questions:

1. Between the 3 of us, could we get a joint mortgage?
2. would we be able to rent to her and the DSS pay the rent to us?

We're not going into it to make money nor are we trying to take advantage of the DSS, we just want to help her out and hopefully the house will be an investment for brother, husband and I when we retire in 20 -25 years time.

We could put down a deposit of £10K and possibly brother could put down a similar amount. Properties we've been looking at range from £140K (ex council houses) - £160K (newer builds)

Thanks in advance for any help.
Kimmi

BobProperty

Before you worry about the answers to questions 1 and 2 (which are yes but with reservations), how are you going to make up the difference between the mortgage and the HB rent? Your figures are cost £140k deposit £20k which would leave a mortgage of £120k which roughly IO is about £600 pcm.

Gorgeous_George

Sounds too dangerous to me. Families can fall out so easily without the added pressure of a 3-way mortgage.

I wish you luck but please, consider all the risks.



GG

Angela_D_3

Would you not be better off acting as a guarantor for her to rent a house privately, even lend her the deposit then the DHSS can pay her housing benefit and it keeps everything simple and doesn't risk you or your brothers life savings and future income.

ManAtHome

Depends how well you (think?) you know your family I suppose. I've helped a couple of sisters without problems - would have been more devastated at being wrong about them than any financial loss if it hadn't.

Hope you manage to work something out.

noyk

I dont want to scare you but the housing market is arguably looking shaky at the moment. It may be wise to do a little more research on whether you should or shoudn't buy particularily in your rather complicated situation.

It's very nice that your thinking about doing this, but you really don't want to end up over stretching yourselves and subsidising your sister as you or your brother may need to the money for emergencies etc. Make sure you add up all the additional costs that goes into buying a running a house.

It sounds a little to me like you could be using your sister being 50 miles away to actually justify the decision. If it is primarily a financial decision, ask yourself does it make sense without any outside influences. Otherwise, it's obvisiouly a question of how much you want her to be nearer sooner than the council will re-house her.

kimmi

Thank you everyone for your replies.

You've given me some helpful advice - Our hearts are ruling our heads at the moment as she's got very depressed, and this was just one idea that was spoken about at the weekend to try and help out.

It probably would be too complicated to help her out this way, maybe helping her with a bond etc to set her up closer to home will be the best way forward at the moment, although I think the DSS will only pay so much in rent for her and she'd have to make up the difference, which at the moment she'd struggle to do. We just thought if we had to help out, wouldn't it be better that we had to pay towards something we'd eventually own, than topping up the rent payment to a landlord.

Anyway, we won't make any hasty decisions just yet.

Thank you all again
Kimmi

barnaby-bear

kimmi wrote:

Hi

Both my brother and I live in tied accomodation with our jobs. Brother earns around £14K pa plus approx £4K in overtime, but pays no rent or council tax on his house. I live with my husband (salaries of £14K and £24K) but pay all bills - rent is around £60 per week, c tax £1100 pa.

Kimmi

Just a thought but if you are in *tied* accommodation and have to move because lose job/retirement you are in one of the priority groups for council/housing association housing (that very small priority group in practice gets instant housing and usually nice quality) - very high up the priority list. If you own an interest in a property you are way back down looking at 3-10 year wait depending on area after leaving job. So for you and your brother the saving for retirement may have to be spent on private rental and cost you more and can the house accommodate you, sister and brother? Who'd get priority? Please check the priorities applied to tied accommodation and effects it may have in future.

barnaby-bear

kimmi wrote:

Thank you everyone for your replies.

You've given me some helpful advice - Our hearts are ruling our heads at the moment as she's got very depressed, and this was just one idea that was spoken about at the weekend to try and help out.
Kimmi

If she's very depressed - she needs to trail back and forth to GP - then there's a paper trail for a clinical condition - once you have a medical need to be rehoused 'near family' or 'support' the council has statatory obligations... kids' teachers/school backing the argument up helps too...

cattie

The other thing you have to take into consideration is if you or your brother move jobs & no longer have accomodation provided. You'll need to get a roof over your heads either by renting or buy buying. How are you going to afford this if you are paying out on a mortgage for your sister.

Also, what would the situation be should your sister somewhere down the line meet somebody & he moves in, would you be happy providing a home for him also?

You mention your sister has applied for a transfer, but if she started actively trying to get an exchange with somebody she may just have more chance of an earlier success.

I agree that she should try to get help from GP in that her depression would be helped if she could be rehoused closer to family. It may also be worth contacting local mp, they often have a bit of clout in issues to do with housing.