Where will your brother live when that happens?we would sell up when one of us retires and pay off what ever is owed
Brother #3 could "lend" you his share and you and brother #2 pay him back at ECB +2% over 10 years.Does anyone have any similar experience with doing something like this and is buy to let the only option ?
He's not sure where he might live in the future (its 15 years away at least) or if we sell up now, he says he thinks he would likely look to buy something smaller or rent.Where will your brother live when that happens?
Thats a great suggestion, but Brother 3 wants his share now as he needs the money, so unfortunately we can't do it this way.Brother #3 could "lend" you his share and you and brother #2 pay him back at ECB +2% over 10 years.
It could be a win-win. You and brother #2 would get cheaper finance than from a bank. Brother #3 would get a better return than a bank deposit.
If you go down this road better to get it drawn up with solicitors.
The brother living there (or I) couldn't afford or get a loan by ourselves to complete the buy out,
I think you should make sure you have an exit strategy; a life event for either of you could change the picture significantly.He's not sure where he might live in the future (its 15 years away at least) or if we sell up now, he says he thinks he would likely look to buy something smaller or rent.
Yep...Could you give us the numbers.
1) The value of the house
2) The amount which must be paid to Brother 3
3) The income of Brother Occupier
4) The value of your own home and the mortgage on it.
For example, would it be possible for you to take out a top up on your home to pay off or part pay off Brother 3.
Brendan
We talked about this and said that we put in place some sort of document of agreement (or similar) done with a solicitor that outlines all the terms and conditions.I think you should make sure you have an exit strategy; a life event for either of you could change the picture significantly.
Better to talk all these through and have a written agreement, than fall out over it later.
We agreed that we would sell up when one of us retires and pay off what ever is owed
I would tend to agree with this from a financial perspective. Insurance costs, house maintenance & LPT etc will be higher on a higher value property.I think you should sell now. The brother at home on €30k would be better off getting his share now too and buying the smaller place now.
The brother who wants his share now would get it and you would also get a nice, tidy lump sum that you could pay towards your mortgage etc.
I think it's pointless waiting until one of you retires and also getting all knotted up in loans etc.
Brother #2 does not have the means to be living in a half-million house.The value of the inherited house is €500k
The amount to be paid to brother 3 is €167K (1/3 of the value rounded figure)
The income of Brother occupier is €30k
Another one here that would recommended selling the property nowWe agreed that we would sell up when one of us retires and pay off what ever is owed
Yep the selling brother needs his share now - unfortunately we would need the full amount in the form of a mortgage loan.You want to borrow €167k at a buy to let mortgage rate of about 5%?
Does the selling brother want the full €167k now?
Do you or the occupant have any money to pay towards the €167k or will you need a mortgage for the full amount?
Can your brother rent a room in the house and so get an income to pay the mortgage?
Brendan
I get that you're trying to help both your brothers here but I don't think you'd be doing brother #1, who lives in the house, a favour nor yourself for that matter. There are too many 'what ifs'. What if either of you get ill, lose your jobs, fall out, refuse to sell in 15 years? What if, on 30K, he can't keep up with the mortgage, house maintenance, bills, etc.
You might all be better off to sell and help, financially or otherwise, brother #1 buy a house/apt of his own - something he can afford to maintain and won't have to move in 15 years. I think you'd all be happier in the end.
Selling the family/parents home was one of the toughest things I ever had to do and, years later, I still wish we could have kept it but it would have been the worst mistake ever. We would be asset/house rich and cash poor - instead we now have a mortgage free house that is more suitable to our needs and more easily maintained.
Good luck with all this.
.
As well as these scenarios there are undoubtedly more that would make the scenario messy to deal with.And if you do decide to go ahead, have a legal agreement for what happens if
- You die ( who inherits your half), does he have a right to continue to live there
- He dies (who inherits his half)
- Your marraige breaks down (your half is an asset)
- He marries or is in a long term relationship
- You have financial problems and need the money
Recipe for disaster.I think he should experiment with 2) first, but you need some cast iron document from him where you can decide to sell whenever you want.
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