Buying sibling out

captainlongtoes

We’ve recently inherited our late parent’s home, I live there and would like to buy my sibling’s half via a mortgage (my sibling is  agreeable to this) but I’m in my late forties, have an average salary and haven’t had a mortgage before. What are the first things I should consider?

Marcon

Affordability and availability. Presumably you are a first time buyer? 

captainlongtoes

I am a first time buyer, yes

AnotherJoe

Ballpark numbers? What is half the house worth, how much do you earn, any savings ?

xylophone

https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/ might be worth a read.

captainlongtoes

Thanks for the replies, sorry for the scant information.
I have no debts, around £20k cash savings, £2.5k stocks and shares ISA. Similar houses on this street cost £530k-£645k. I earn just under £38k

Keep_pedalling

You are going to need around £300k to buy him out which is not doable on your earnings. Apart from the house we’re there any other assets in the estate?

captainlongtoes

I’m due to inherit around £25k, which would make my savings around £45k in total but that is it

captainlongtoes

So it looks like we may need to sell, and I find myself a home that I can put the approx £300k towards and hope to be able to obtain a mortgage on the rest? Sorry but beyond the very basics of a mortgage I’m new to all of this

Keep_pedalling

captainlongtoes said:

So it looks like we may need to sell, and I find myself a home that I can put the approx £300k towards and hope to be able to obtain a mortgage on the rest? Sorry but beyond the very basics of a mortgage I’m new to all of this

That would sound the best solution, it may be a bit of a wrench for you but better to make a clean break than to overstretch yourself trying to hang on to the family home. Good luck.

getmore4less

Does your sibling need the cash or would they be willing to accept it as a debt where you pay it off from earnings.
right place and if big enough might be able to increase income through letting rooms longer term of if the holiday market picks up short terms.
depends how much you want to try and keep the place, if it is biggerthan you need the running costs will also be higher.

mortgage cost rough idea:
if we work on £300k over  25years its going to be around £1200pm, even 30years over £1k, getting interest only will be hard £375 which may be affordable.