When to complete

pollyanna24

I am buying my brother out of our joint house and have received the mortgage offer and we have signed the Transfer etc.

My solicitor has said that one of the next steps will be to decide a completion date.

We are in no rush as my brother doesn't know when he is moving out as his wife hasn't sold her flat and they haven't found a house yet, so can we just delay completion until shortly before when my mortgage offer runs out, say late February or is there a reason why we will have to complete quicker?

libf

You can complete when you like, subject to your mortgage offer still being valid. However, to exchange you would normally need to pick a date. Perhaps talk to your solicitor about completion being on notice if you need flexibility?

pollyanna24

libf wrote: »

You can complete when you like, subject to your mortgage offer still being valid. However, to exchange you would normally need to pick a date. Perhaps talk to your solicitor about completion being on notice if you need flexibility?

Hadn't thought about that actually. I just assumed my brother would get the total amount I am giving him on the date of completion, but I had completely forgotten about exchange.

When we exchange, do I have to give him 10% of the total amount he is selling his equity to me for? This would be £10,000 and is being funded from the 2nd mortgage I am taking out.

libf

pollyanna24 wrote: »

Hadn't thought about that actually. I just assumed my brother would get the total amount I am giving him on the date of completion, but I had completely forgotten about exchange.

When we exchange, do I have to give him 10% of the total amount he is selling his equity to me for? This would be £10,000 and is being funded from the 2nd mortgage I am taking out.

Might be easiest to exchange and complete at the same time then, if you don't have the money available. I guess your brother could agree to an exchange with a token amount though... Best to ask the conveyancer.

pollyanna24

libf wrote: »

Might be easiest to exchange and complete at the same time then, if you don't have the money available. I guess your brother could agree to an exchange with a token amount though... Best to ask the conveyancer.

Thanks for this. Wouldn't even have thought of it.

If we wait another month or so, I will have 10% from my own funds to actually give to my brother, but then if I do that, the mortgage I have applied for would be too much. What happens in that scenario?

libf

The conveyancer will return any surplus funds to you after completion. Quite often happens where payments have been made against a mortgage between the request for the redemption amount and when the mortgage is actually cleared.

Probably better to exchange and complete at the same time though, so that you don't tie your funds up between next month and whenever completion takes place. Unless your brother needs the 10% sooner.

pollyanna24

libf wrote: »

The conveyancer will return any surplus funds to you after completion. Quite often happens where payments have been made against a mortgage between the request for the redemption amount and when the mortgage is actually cleared.

Probably better to exchange and complete at the same time though, so that you don't tie your funds up between next month and whenever completion takes place. Unless your brother needs the 10% sooner.

No, I don't think he does. He is using the money to fund his own property, but he hasn't even started looking yet.

JimmyTheWig

Would it make sense to buy now and then your brother pays you the equivalent of the mortgage interest in rent?

I would have thought that if your brother says he doesn't need a deposit then you won't need to give him one.
But if you don't give him a deposit how will he fund a deposit on the place he's buying if exchange and completion on the current property happen at the same time as on the property he is buying? Which is why it would make sense to me for you to buy him out first.

Also as it stands it sounds very complicated when they put in an offer. Vendor asks "are you a cash buyer, in a chain, etc?" and they have to answer that, technically, they're in two chains. If you buy him out first then it's just a simple single chain.

libf

Mortgage company probably won't like someone with an interest in the property staying on after completion... Also then there's less incentive for brother to get a move on and leave...

Thrugelmir

pollyanna24 wrote: »

No, I don't think he does. He is using the money to fund his own property, but he hasn't even started looking yet.

Sounds as if your plans are on different tracks.

pollyanna24

Thanks everyone.

The plan was / is for him and his wife to come back from honeymoon and then start looking. They came back on Monday.

Everyone has April in their heads for when the plan is for them to move out. I wanted the house in my name before that due to the prospective rise in interest rates. I'm not going to throw him out as soon as it's in my name, but it will be in my name by the time they come to exchange/complete on their own house, so he will have the £100,000.