Brother wants to take out joint mortgage against my will

Phil1111_2

Problem is that I’m happy just renting it out and keeping everything as it is. However unfortunately he’s not.

The moment it’s put up for sale the Tennant will
move out and the house will be empty. Maybe for a couple of years. Who knows? My brother would not bother upkeeping the property either, mowing lawns etc. This will all be left to me.

We will also have to pay capital gains too.

Keep_pedalling

Phil1111 wrote: »

Problem is that I’m happy just renting it out and keeping everything as it is. However unfortunately he’s not.

The moment it’s put up for sale the Tennant will
move out and the house will be empty. Maybe for a couple of years. Who knows? My brother would not bother upkeeping the property either, mowing lawns etc. This will all be left to me.

We will also have to pay capital gains too.

How about offering to buy him out?

Fireflyaway

I would stick to what your instinct says and don't do it. It might seem like just signing a bit of paper but in reality you are liable to pay it if he defaults and it will damage your credit score.
My husband and I nearly acted as a guarantor for a family member till we thought about his past behaviour and what the impact would be on us if he did default. We told him no in the nicest possible way and we haven't spoken since!
In your situation I'd break financial ties soon as possible. It would be a shame to fall out over your late mums house. Sell up and split the proceeds. Yes you might lose some money in tax etc but if you don't what's the long term plan? Then you are both free to do as you please.

clairebeth

Can YOU get a £90k BTL mortgage at 50% ltv? Then pay him the £90k (or whatever the agreed value is). He gets money to sort out his house, you own the whole rental property and get the whole rental income. Pay off the £90k asap and own it outright. Any decisions about renting or selling once you pay him are yours and yours only. Either way, I think you need a solicitor and a financial advisor.

Phil1111_2

Thank you for all your replies.

Yes I need to find out about the possibility of a mortgage myself. I don’t and can’t affiord to overstretch myself over this.

clairebeth

You are absolutely right not to get yourself in a situation that you are uncomfortable with or that is not sustainable. Depending on your rate and term the extra money you will be getting in rental income may cover the repayments, but get advice before you do anything. Would you prefer to just get the £90k lump sum if he can buy you out and investing it some other way? Lots of questions to consider, make sure it's the right choice for you, not your brother or your tenant.

getmore4less

Phil1111 wrote: »

Thank you for all your replies.

Yes I need to find out about the possibility of a mortgage myself. I don’t and can’t affiord to overstretch myself over this.

The letting business might stack up with debt.
the tax position is changing so that needs considering.

if selling is a tough(time) option then continuing the let may be the lowest loss option.

if we work on needing £90k(maybe squeeze him down on value) to buy him out and a bit more to act as a cash flow buffer lets go for £100k total.

Numbers look a bit like this

£100k @ 2.4% repayment over various terms.
10 £938
15 £662
20 £525
25 £443
30 £390
IO £200

You should be able to claim tax relief up to full values at the time it was let if you have other debt

if we work with tax 20% on the full £600 after that and interest you have £280 to top up the maintenance pot or pay off capital. some will go(gas cert) even if you never have to fix anything

looking at a 30y loan on that cashflow and manage the cost down as much as possible.

if you don't need the cash buffer take 10% of the mortgage costs might be able to make 25y term work but very tight.

With £600pm rent and depending on the yields for the area you are looking at investors paying around £150k max for the place the yield is just not there.