Two sisters purchasing a house.

Brendan Burgess said:
I would have thought it was more difficult for a married couple with kids to split than for two sisters.
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False equivalence Brendan. Everything becomes immensely more difficult when kids are involved.

In the OPs case, if the sister without funds has a child, the other sister with €400k equity going in will never get her out of the house until the child reaches adulthood, even if she never pays a cent in the meantime.
 
T McGibney said:
In the OPs case, if the sister without funds has a child, the other sister with €400k equity going in will never get her out of the house until the child reaches adulthood, even if she never pays a cent in the meantime.
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Fully agree with you and I would strongly advise against such an involvement.

But I assume that the basic information in the OP is full. And if there are children or husbands or partners involved, that he would have mentioned it.

Brendan
 
Brendan Burgess said:
Fully agree with you and I would strongly advise against such an involvement.

But I assume that the basic information in the OP is full. And if there are children or husbands or partners involved, that he would have mentioned it.

Brendan
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I agree with you Brendan, my point is more that she may not have a child now but if that is a possibility in the future, it would change and complicate everything if it materialised.
 
T McGibney said:
Once it's human beings we're dealing with Brendan, everything and anything is possible. It was common decades ago for siblings to live permanently with each other throughout their lives, but that went out of vogue as we got more prosperous and life expectations increased accordingly. I can't help thinking there were good reasons for that decline.

I personally think the sisters mentioned by the OP are crazy to countenance buying a home together. You don't need a €700k house to get on the housing ladder, and one of them already has €400k in funds.
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If they've already lived together and get on ok in that situation its not illogical, but as many posters have suggested they need a good set of legal advice and agreements to give themselves a future exit if and when it occurs.
I fully agree RE the 700k home - there's plenty of value to be had if you are willing to buy a smaller home or shift location to a cheaper area.
 
Brendan Burgess said:
It would be cleaner if one paid €350k and the other borrowed €350k.

However, in the above case, it should be treated as a loan of €50k from one sister to the other and it should be documented, and ideally, repaid.

Of course, they could agree that one owns 40/70ths of the house and the other 30/70ths.

Whatever they do, they must do an ownership agreement covering what percentage they own and what happens if and when one wants out.

Brendan
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If I'm not incorrect in a joint ownership scenario the bank would want the borrowing in the name of both owners? I don't think banks currently lend for a portion of a residential property to domestic borrowers unless its an affordable home?
 
lff12 said:
the bank would want the borrowing in the name of both owners?
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Correct.

The loan would be in both borrowers' names. But one sister would be the true borrower and would make the full repayments.

The other sister would have to realise that if the other sister did not pay the mortgage, her own rating would be damaged.

Brendan
 
HI

In this situation can the True Borrower Sister just add the cash buyer siste's name to the m,ortgage or does the whole mortgage application need to be done jointly?
 
Dropshot said:
HI

In this situation can the True Borrower Sister just add the cash buyer siste's name to the m,ortgage or does the whole mortgage application need to be done jointly?
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A borrower can't unilaterally add somebody to their mortgage. It's a contract with the lender so the lender needs to be involved.
 
ClubMan said:
A borrower can't unilaterally add somebody to their mortgage. It's a contract with the lender so the lender needs to be involved.
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Thanks I understood that. Just wondering if it is as simple as adding other person or is it more involved?
 
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