I inherited half a house with my brother who wants to mortgage it

popcornguess

My Brother and i Inherited my Aunts house he lives there with his wife and child, he says he wants to mortgage it for himself, what are the disadvantages for me if i sign, he says there wownt be any , is this correct ? 

Keep_pedalling

If the the idea is to buy your share out then that is great for you as at the moment you own half a house which provides you with no benefit whatsoever. If he just wants to raise some equity for home improvements them I would not agree to do it.

lr1277

1) Owning the half share may increase the stamp duty payable should you choose to buy in the future. 

2) Also if you are a joint mortgagee, you are liable if your brother stops paying. Can you afford the payments or even the whole mortgage if your brother stops paying? Say your brother loses his job, what then?

3) Whilst your brother is living there he should pay you rent on half the property. As your brother is living there I don’t know if that means you have landlord obligations. If you receive rent you need to submit a self assessment tax return, if you don’t already. 
As joint owner how are bills/repairs paid? Will you contribute half for any expenses? Say the windows need replacing, who pays and how much?
4) when do you get your share of the money? When you both sell the place or he dies? Or if he dies he gifts it to his partner/children with you remaining as a joint owner?
Personally I would advise you to get rid!

Either the property is sold and you get your share or your brother gets together the money to buy out your half share. Am not sure about this but if selling to your brother use a true market value figure and don’t under sell it to him. Potentially there may be a tax liability for you if you under value the place. Hopefully another forum member can advise.
If you and your brother agree he will pay rent, insist it is half the market rent otherwise there may be complications for you in the future.
As an aside as a landlord there are a whole lot of obligations which I can’t remember off the top of my head. If you read the house buying/renting board you will get a better idea.
HTH

silvercar

You need to confirm what your brother means by “mortgage it for himself”. Either he wants to buy out your share by taking a mortgage or he wants to mortgage his share to have a lump sum. The latter really isn’t in your interest at all, so the first step is to find out if he wants to buy you out.

MWT

popcornguess said:

My Brother and i Inherited my Aunts house he lives there with his wife and child, he says he wants to mortgage it for himself, what are the disadvantages for me if i sign, he says there wownt be any , is this correct ? 

He cannot mortgage half a house, he needs your consent because the mortgage has to be against the whole of the house including your half.

Many reasons why that is bad for you as outlined above.

If he wants to buy you out then that is a good thing if that is what you want, and that transfer of equity would need to be arranged to occur at the same time as the mortgage so there is no risk of him getting the mortgage and then changing his mind about the use of the proceeds...

Tread carefully and get advice from your solicitor once you are clear that he does want to buy your half...

If he does not wish to buy your half then the answer should be no, unless you both want to release capital from the house and will both share the proceeds of the mortgage and the payments towards the mortgage...

As mentioned above, if he is living in the house and you are not then he should already be paying you rent for your half of the property....

popcornguess

popcornguess said:

My Brother and i Inherited my Aunts house he lives there with his wife and child, he says he wants to mortgage it for himself, what are the disadvantages for me if i sign, he says there wownt be any , is this correct ? 

 Hi everyone, thanks for the comments, just to be clear my brother  wants to mortgage the full house in his name and pay it back himself without me. I am under a lot of pressure to sign as my family say there is nothing to worry about, but i dont agree with them. He does not want to sell and i will not get rent my mother said she will cover the payments if he cant but she is old and i dont know what will happen in 20 years time when she will likely not be here. Thankyou for the advice, i did suspect that it was not going to be good for me but i wanted to know why.

Caz3121

popcornguess said:

my brother  wants to mortgage the full house in his name and pay it back himself without me. 

does that mean he will be giving you half the value and your name will come off the deeds in return?

HampshireH

He needs to buy you out otherwise you effectively gift him your inheritance.

MWT

That would be a hard 'no' for me, but I do understand how the family pressure works...

You seem to be getting no benefit at all from your inheritance and that is not right.

TheMilkmansDad

I would look after yourself - the old adage, never loan money to family or friends comes to mind. Looks like you may be being taken advantage of.

Who handled the probate for your Aunt - family or solicitor?

I would offer to sell my half to the brother and wash your hands of it. Once he's bought your half what he does is up to him.

popcornguess

HampshireH said:

He needs to buy you out otherwise you effectively gift him your inheritance.

Can you explain why, because i said that to my family and they asked why it means that and i didnt have an aswer.