2nd Charge on Property

pollyanna24

I am in the process of looking to buy my brother out of the property. I can only get an additional mortgage of £100,000 in order to do this, but he wants in the region of £115,000. He doesn't need the money to fund his next property, but I can't afford to give it to him now.

Is there any way a 2nd charge could be put on the property so that I when I do come to sell years down the line, he can recoup his £15,000 (if that is what we agree as the extra amount)?

Shahni

You'd normally need the written permission of your lender to put a second charge on the property, so check their requirements

Pete9501

I have had a second charge on a house but both charges were in my name and I was still within a good LTV ratio, if you can only raise £100k the mortgage company might not want to accept the second charge.

The other option is if he doesn't need the money now is to write a letter to him promising to pay him £15,000 in 10 years time. You pay into an investment geared to make £15k over the next 10 years and give him the paper work. Its all on trust, but my sis just paid me £12k after 12 years.

pollyanna24

Thanks for this.

Might try suggesting it to him when the time comes.

I am borrowing up to my limit with the extra £100,000, but will still have good equity in the property. House worth £340K and the mortgage will be £205K.