Brother buying share of house

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dodo

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I have an interest only mortgage of 320K, the house is rented out which covers the mortgage until march next year.

My brother and I have talked about him buying half the house which on princinple would be 190K.

He is a FTB so 6% stamp duty applies on his 190K unless he decided to live there which is a possilbilty as he lives at home at the moment and is thinking of moving out to rent with his mate.

The rent is 1200 a month which his mate would pay to me 600E and he would look after the other 600E.

He earns 35K a year and has cash of 40K so no issue getting the 190K.

Would I just add him to the current 320K mortgage and take 30K in cash,
Also what would be the the simplist and cheapest route to take regarding legal fees ie for buying and selling of half the house, can his name just be added to the house deeds by a solicitor, or is it the full say 895 plus outlay for both of us.

What are the pitfalls if any?
 
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He would pay 600E into the mortgage each month and his mate would pay the other 600E, so 1200E would be paid into the 320k interest only mortgage which is wha tthe current tenants are doing, We could stick with the same tenents but as he is thinking of moving out , this way he would not have to pay the stamp duty.It is his choice to move in or not.Regarding the FTB Webtax he feels he will never be able to buy in Dublin anyway and would never move outside the pale so to speak.The best he could have got by himself was 210K of a mortgage and where would he buy in dublin, he is happy to rent for a long time as he rented for 5 years in Helsinki and it is common practise there.
extopia said:
Why would he pay rent if he owns his half of the house?
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What is the a)monthly mortgage repayment b)if it was changed from interest only c)if he became an owner/occupier?

He would be responsible for half the monthly mortgage repayment only if a joint owner. If the property is rented out and the monthly repayment is less he is entitled to half the excess or alternatively contribute half the difference if the rent doesn't cover the mortgage repayment. Also it might be a good idea to set up a joint contingency fund for repairs etc

You also need to put his name on the title deeds and it is a good idea to draw up a joint ownership agreement to outline what would happen if either of you wanted to sell the house in the future. There are copies of such agreements on the site.
 
since the mortgage is interest only and house prices are still falling he wouldn't be any better of taking 1/2 this house than he would be renting imo. his FTB status is valuable & he should think carefully before losing it. he might not be able to get mortgage approval now but things could change a few years down the line - what if he wants to buy with a girlfriend/wife?
 
He has thought that throught and is happy,price he is getting it at is 3k less than a house in the same street went for last month
webtax said:
since the mortgage is interest only and house prices are still falling he wouldn't be any better of taking 1/2 this house than he would be renting imo. his FTB status is valuable & he should think carefully before losing it. he might not be able to get mortgage approval now but things could change a few years down the line - what if he wants to buy with a girlfriend/wife?
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I think your brother will have to pay stamp duty. It's not possible to have a PPR/Investment property combo. He will lose his FTB status without deriving any benefit from it. His solicitor "should" have a definitive answer. There have been so many Quasimodoesque attempts at achieving this discussed on this forum that I lose track of what is the right answer.
 
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