On Deeds, but not on Mortgage?

pollyanna24

TrickyDicky101 wrote: »

What's the value of the property? Do you intend to go full time again?

The property is approximately £275,000.

Not sure if I intend to go back full time, might do when both my children are in full time education (youngest starts reception in Sep 2015), but I could get a mortgage off my part time salary for £85,000 which is why I said I can afford to take the mortgage on by myself.

It's just paying my brother his half of the equity that would be the problem, but he said as long as he can get a mortgage in his own name, then he would be happy to leave the money in our house until I either sell up or can raise the money myself.

pollyanna24

Thinking about it, we would have to get some kind of Trust Deed written up anyway as he would stop paying the mortgage when he moves out, so therefore it wouldn't be a 50/50 split anymore.

Just say, taking the figures I have if we sold up today.

House value: £275,000
Mortgage: £114,000 (approx)
Total equity: £161,000
Each half of equity: £80,500

£80,500 is 29% of the house value at the moment, so that is how much we each own in the property.

Could we get a Trust Deed saying that he will get 29% when I either sell the property or 29% of the value of the house when I manage to raise enough money to buy him out? Therefore, he may get more than £80,500 depending on how house prices go over the next few years.

getmore4less

THats a reasonable equitable approach,

Allthough technicaly to stay equitable he should pay for maintenace/capital improvements at that % and you should pay a market rent for the use of his % owned.

Might be convenient to ignore that part.

ethank

There can be more borrowers than owners but not more owners then borrowers otherwise the lender will find it difficult to repossess the property.

pollyanna24

ethank wrote: »

There can be more borrowers than owners but not more owners then borrowers otherwise the lender will find it difficult to repossess the property.

This never occurred to me, but makes perfect sense as someone further up the thread pointed out.

Is there an option that me and my brother haven't looked into as to what we can do?

He wants to safeguard his equity in the house and if he is taken off the deeds, he won't be able to do that. Just wondered if there was something else we could do that would state that he would get 29% (or whatever we work it out to be) of the value of the house when I sell up or am able to raise enough money to buy him out?

Mojisola

pollyanna24 wrote: »

Is there an option that me and my brother haven't looked into as to what we can do?

He wants to safeguard his equity in the house and if he is taken off the deeds, he won't be able to do that. Just wondered if there was something else we could do that would state that he would get 29% (or whatever we work it out to be) of the value of the house when I sell up or am able to raise enough money to buy him out?

Could you just have a loan agreement with him which would be repaid on the sale of the house (or earlier if the money becomes available)?

TrickyDicky101

Thing is, he won't be coming off the mortgage unless you sell the property (or you earn enough to remortgage solely in your name) so he currently has that protection in place by virtue of being registered on the title.

I don't think the issue here is worrying about how he protects his investment - it's more to do with what are you going to do if he is determined to move out and buy another property which could necessitate you both selling the current property.

pollyanna24

TrickyDicky101 wrote: »

Thing is, he won't be coming off the mortgage unless you sell the property (or you earn enough to remortgage solely in your name) so he currently has that protection in place by virtue of being registered on the title.

I don't think the issue here is worrying about how he protects his investment - it's more to do with what are you going to do if he is determined to move out and buy another property which could necessitate you both selling the current property.

True and this may happen. That we have to sell that is.

He has said that we will look into all the options when he is looking into getting another mortgage in 2 years' time.

I should be able to take on the mortgage by myself. I earn £27,000 and will need £85,000 mortgage.

pollyanna24

Mojisola wrote: »

Could you just have a loan agreement with him which would be repaid on the sale of the house (or earlier if the money becomes available)?

If it really is as simple than this, this is probably what we will do. Thank you.

Mojisola

pollyanna24 wrote: »

If it really is as simple than this, this is probably what we will do. Thank you.

It would be if the mortgage company will let him come off the mortgage - that's going to be the big problem.