Brother letting us have his house for deposit, how does it work?

matt2877

Hi everyone, me and my partner are looking at buying a new build house and her brother has kindly offered to let us use his house as a part exchange against our new house, he currently rents it out. Is this aloud and if so how would it work? would he have to sign his old house over to us first? Would he have to have his name on the house or on the mortgage? Any help much appreciated,

maninthestreet

So why not just buy her brother's property from him, at a 'knock-down' price???

getmore4less

What conditions is he putting on this,

gift
loan
niether

agree with the above, why not just live in that house.

matt2877

To live in it is our second option, He still owes a chunk on the mortgage, so if he was to get the £80,000 valuation he wants for it he would be able to lend us £15,000. Our first option is to use this to buy a new home, his current home has a few damp problems and isn't in the best area and we have a baby on the way.

He is currently losing money on the house renting it out to his friend, so is happy just to have it off his hands and there are no conditions on the payment back, he is happy for us to start paying it back as and when we can afford it and as slowly as we like.

The post was more to see if anyone knows if this is possible to do, part exchanging his house against a new one for us

harvey115

matt2877 wrote: »

To live in it is our second option, He still owes a chunk on the mortgage, so if he was to get the £80,000 valuation he wants for it he would be able to lend us £15,000. Our first option is to use this to buy a new home, his current home has a few damp problems and isn't in the best area and we have a baby on the way.

He is currently losing money on the house renting it out to his friend, so is happy just to have it off his hands and there are no conditions on the payment back, he is happy for us to start paying it back as and when we can afford it and as slowly as we like.

The post was more to see if anyone knows if this is possible to do, part exchanging his house against a new one for us

I would suggest:
- Sell the house
- Get the gifted deposit
- Get a home somewhere you like

Moving houses is not cheap especially when owning them:
- Legal fees
- Mortgage fees - valuation, ERC's, arrangements fees etc
- Stamp Duty if any

harvey115

Part exchange may not be possible straight away because the house is not on your name.

Once the house is sold you can get a gifted deposit from the brother. He may have to sign on a document saying the deposit is gifted and that he does not want it back.

Thrugelmir

Buying your brothers house would be the most economic situation all round.

You could then repay the debt owed to him in the future when you sell the property.

maninthestreet

As others have said, you can't use a property you don't own in part-exchange for another property. How much is the new property you are interested in? Do you have any savings?

Tiddlywinks

Is your OH's brother finding it difficult to sell the house himself? Is that why he wants to part exchange it?

If not - then let him sell it on the open market and then give / lend you some money.

I don't think the buying company would be happy to take a property owned by someone else in part exchange - particularly one that is still mortgaged.

Why are you making this so complicated - he sells -> lends you some money -> you then buy somewhere from there (as long as you can find a lender that accepts a gifted deposit).

matt2877

He has had it on the market before without much interest and also he did a part exchange himself on his current new home using his partners house and they gave him a good deal so thats why were looking into it. The house that they Ben Bailey took off them in part exchange they actually ended up selling for £13,000 less than the value paid to her brother for it.

bigadaj

matt2877 wrote: »

He has had it on the market before without much interest and also he did a part exchange himself on his current new home using his partners house and they gave him a good deal so thats why were looking into it. The house that they Ben Bailey took off them in part exchange they actually ended up selling for £13,000 less than the value paid to her brother for it.

Use but tis like part. Exing a new car, the excess paid on yours is simply lumped onto the new house, car or whatever.