Purchase of a new property with part mortgage

[ademco]

Hello there, this is a bit of a difficult question.
Basically I live with my parents on a smallholding of which they are the owners. In the near future we are looking at selling this place and buying a farm in wales.
My brother who owns a house in town is selling up and going to come live with us and partner plus kids are going to live with us as one big family.
Now to buy said farm we would pay for 2 thirds of the property value in cash with no mortgage and my brother would have a mortgage to cover the rest. Is this possible and how does it work? Many thanks.

 

[EFLImpudence]

If he defaults, you will have to sell or raise a mortgage yourself.

Maybe all sweetness and light at the moment, but ...

 

[fillyboy]

Whereabouts in Wales?

 

[Mottie]

Could be complications if the brother and partner split up too. I'd get proper legal advice on this if I were you. Tenants in common may be a solution but as I said, get advice on that.

 

[dontbelieveawordofit]

Whereabouts in Wales?

west is best

 

[big-all]

you would have a mortgage that would need to be paid
is the intention for him to have a 1/3 share in the property or just pay rent that equals the third
you who puts the 2/3rd down should have the mortgage in your name along with your brother as you cant have a mortgage on a property you are not connected to you would need all names to be on the mortgage as joint owners and be equally responsible??
if you brother is just renting you get the mortgage and charge him rent but as said get advice
unless its changed the mortgage company hold the deeds [own the house] till paid off rather than a loan against the house ??

 

[IT Minion]

You can do it, but as big-all says it's a bit complicated and not risk free. You'd need to be tenants in common rather than joint tenants.

You would all be liable for the mortgage so if your brother decided he wasn't going to pay then you all would have to find the money for the mortgage. Even then he'd still retain his 1/3 share.

You would absolutely need a lawyer involved, but it only costs one or two hundred to get the paperwork drawn up by one of the usual house conveyancing solicitors.

Most banks won't lend to five people on a mortgage application which reduces your availabile lenders. Id plan to use a mortgage broker, but if it's a farm you might have been planning that already.

 

[johnny2007]

The problem I foresee here is that there's a non family member involved.
Ok, even family members can be backstabbers, but it happens less often.
If your brother had to split from his partner, the partner could claim a share of the property.
My friend was in the same situation for many years and eventually had to pay off the ex sister in law.
So as others suggested, get a solicitor involved with this so to have a guarantee that nobody will be kicked out of the property if there's a fall out.
With regards to the mortgage, banks don't have any problem lending money to anyone who can pay it back.
One thing though, if the sum you're asking is under £70/80k, many banks will not be interested as they would get very little return.
However a good broker works wonders in these situations of small mortgages.

 

[motorbiking]

Are you going to live in different houses? It may be better to create a freehold (whole farm) and leasehold (each house) on the property so that any default only affects the portion of the property leased and mortgaged. Your brother would need an option to buy in to his share of the freehold once he is mortgage free. Only his leased house would have the mortgage against it. The spanner in the works would be any restrictions on the agricultural land, but tenant farmer concept is still possible.

 

[ademco]

The problem I foresee here is that there's a non family member involved.
Ok, even family members can be backstabbers, but it happens less often.
If your brother had to split from his partner, the partner could claim a share of the property.
My friend was in the same situation for many years and eventually had to pay off the ex sister in law.
So as others suggested, get a solicitor involved with this so to have a guarantee that nobody will be kicked out of the property if there's a fall out.
With regards to the mortgage, banks don't have any problem lending money to anyone who can pay it back.
One thing though, if the sum you're asking is under £70/80k, many banks will not be interested as they would get very little return.
However a good broker works wonders in these situations of small mortgages.

The amount borrowed would be £200000

 

[johnny2007]

£200k???
Are you buying the whole of Wales?

 

[Ryler]

My brother who owns a house in town is selling up and going to come live with us and partner plus kids are going to live with us as one big family.

Sounds like a recipe for disaster.

 

[Brigadier]

Sounds like a recipe for disaster.

Or a "dramatic recreation of actual events", over three nights on itv, in about ten years.

 

[dontbelieveawordofit]

£200k???
Are you buying the whole of Wales?

how much do you think you can buy a farm for?

 

[Ryler]

Average price in england and wales is about £8000 per acre.