Idiots guide please

LK78

Hi everyone:

Please don’t berate me for being an idiot here:
Basics are that I want to buy a house, I have a small deposit (£20k) and work full time (no debt at all) I also own outright my brothers house (he is disabled and I take no income from his House)

Does owning his house help me in anyway, can I use it as collateral etc or is it irrelevant and I’ll just have my small deposit?

I’ve never dealt with this before, ex husband used to deal with this stuff.

Thanks in advance.

Louise

ACG

Is there a mortgage on your brothers home? If so, who pays it?

How much is your income?
How much do you want to purchase for?
Do you have any kids?
Do you have any credit cards?
- If so, what is the balance?
Do you have any loans with more than 6 months to run?
- If so, how much a month are you paying?
Do you have a student loan?

LK78

Hi
No mortgage at all, owned outright.
No debt of any kind, just the standard monthly bills.
No kids:
No idea of how value of property I would want to buy, no idea what i could look at as I’m pretty clueless in the mortgage knowledge area.
I earn £23500 per annum.

davidmcn

If anything the other property hinders you, as you'd need to pay the additional rate of stamp duty for buying a second property, plus you have the financial commitment of paying for maintenance / insurance etc. I don't think normal residential mortgage lenders will let you add in the other property as additional security, though I could be wrong (in any event, your brother residing there would restrict their options for repossessing it).

LK78

Oh dear:
Ok, thanks for your advise

ACG

You would be looking at around £120k purchase price as a maximum.

You could potentially secure a BTL against your brothers home, but that then needs paying and it is either an expense to you (reduces the mortgage you can get) or an expense to your brother and incurs tax.

AnotherJoe

Question for other posters here. I wonder if the brother could buy the house from the OP, via a loan secured against the house. No money would change hands. That way OP would not own a house and not have to pay the extra 3%.

davidmcn

AnotherJoe wrote: »

Question for other posters here. I wonder if the brother could buy the house from the OP, via a loan secured against the house. No money would change hands. That way OP would not own a house and not have to pay the extra 3%.

Possible, but might count against brother from a benefits point of view.

getmore4less

More background would help to see if there are options.

MrCH

AnotherJoe wrote: »

Question for other posters here. I wonder if the brother could buy the house from the OP, via a loan secured against the house. No money would change hands. That way OP would not own a house and not have to pay the extra 3%.

If the brother is disabled, how is he getting a big enough loan to purchase a house?

AnotherJoe

MrCH wrote: »

If the brother is disabled, how is he getting a big enough loan to purchase a house?

The "loan" is from the OP not a building society or bank. No money changes hands. It's repaid upon sale of the house.
Let's say the house is worth £100k. The OP has an asset worth £100k. Ownership is changed to the brother along with a document stating that brother owes OP £100k. So OP still has £100k of assets.