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Original poster

Your views on the money side of buying a flat - who gets what?

35 replies

googleismyfriend · 30/04/2019 10:48

I'm putting in £4000.
Brother is putting in £5000.
Help to Buy loan is £29,000.
Monthly mortgage payment is £280 and I will be living there on my own.

My brother wants me to pay the full mortgage payments on my own during the period I will be living there (about 2 years) and he wants me to pay an extra £1000 on the Help to Buy Loan as I will effectively be living rent free for 7 months when I make up the £1000 extra that my brother will have put in the deposit. Thereafter we will rent the property out and share the rent proceeds equally.

On sale, my brother and I will split the sale proceeds equally.

Does this sound fair to you?

OP posts:
Original poster
googleismyfriend · 30/04/2019 13:24

Bump

OP posts:
sunshinesupermum · 30/04/2019 13:27

Yes it does to me - how do you feel about it, though?

Whatever you do you must have a solicitor draw up a legal agreement on the final arrangements.

Pipandmum · 30/04/2019 13:31

Sounds fair to me.

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General money
Original poster
googleismyfriend · 30/04/2019 13:40

So is it fair that after only putting in a 4k share my brother gets half the property? Whereas I'll be paying 8k at least?

@sunshinesupermum we will be having a declaration of trust.

OP posts:
sunshinesupermum · 30/04/2019 13:44

Am confused - how will you be paying £8K at least?

I thought you would be paying the £1K to bring yourself in line with his £5K. He will lose out on possible rental income while you live there for 2 years rent free.

Good to know you will have a declaration of trust!

ItsAllGone19 · 30/04/2019 15:23

It's actually weighted in your favour because your brother is missing out on the rental income for the two years you live there (around £7k if two years).

That is him treating you well. You paying £1000 extra off the loan would bring your deposit equity level with your brother. I'm not sure why you think this is weighted in your brother's favour?

listsandbudgets · 30/04/2019 15:31

I thought that one of the conditions of help to buy was that its your only home and you don't rent it out until you'd fully repaid the loan. It could have changed but I'm sure I remember something like that

Original poster
googleismyfriend · 30/04/2019 16:39

Am confused - how will you be paying £8K at least?

Because I'm paying a 4k deposit and then around 4k on mortgage payments

OP posts:
Original poster
googleismyfriend · 30/04/2019 16:40

@listsandbudgets Yes I know, we will pay off the help to buy loan in 2 years and rent the property thereafter.

OP posts:
MeanMrMustardSeed · 30/04/2019 16:42

But you are paying those mortgage payments in exchange for living there!

HeddaGarbled · 30/04/2019 16:44

This is not what Help to Buy loans were intended to be for 🙁

Original poster
googleismyfriend · 30/04/2019 16:48

HeddaGarbled - it will be my home for at least 2 years. I don't own a home currently. And once you've paid it off you can rent it out. I couldn't afford to rent a home but I can afford the mortgage payments. Thanks for the concern.

OP posts:
donajimena · 30/04/2019 16:48

What hedda said. I'm guessing he already owns which is why you are fronting it. Thats so sneaky.

HollowTalk · 30/04/2019 16:52

I don't understand - is the Help to Buy loan the same thing as the mortgage?

Original poster
googleismyfriend · 30/04/2019 16:52

He doesn't already own. Neither of us do. Don't assume what you don't know, @donajimena

OP posts:
HollowTalk · 30/04/2019 16:56

Does he currently pay rent?

Original poster
googleismyfriend · 30/04/2019 16:59

No. We both live with our parents and we are buying our first property together.

OP posts:
spannerintheneck · 30/04/2019 16:59

Taking advantage of a system nicely there 🙄

Qweenbee · 30/04/2019 17:00

I think it sounds fair. You are benefiting from living there so need to pay some rent (reduced rate so you are benefiting) and he is losing out on 2 years of rental income. It seems a good deal for you.

MollysLips · 30/04/2019 17:03

So you'll have paid off the Help To Buy loan during the first 2 years, while you're living there?

How much are those payments? Who's paying those?

Original poster
googleismyfriend · 30/04/2019 17:05

Spannerintheneck - it's our first home. I will be living there for the duration of my job which is why I say at least 2 years. If I don't get a renewal I will have to leave and look elsewhere. You and other posters, have set out to accuse me and it's totally unfair when you don't know the full circumstances of my situation.

OP posts:
StylishMummy · 30/04/2019 17:05

@googleismyfriend mortgage adviser here- you can't rent out a property that's been subject to a help to buy loan until it's fully repaid. Some lenders also stipulate you need a certain % in equity before they'll allow you to rent out the property and without this you'll invalidate your insurance.

It's not designed for BTL properties

Skiptheskip · 30/04/2019 17:06

You are manipulating the help to buy system, and you're benefitting massively from the suggestion your brother has made. It's more than "fair", it's heavily skewed in your favour.

Original poster
googleismyfriend · 30/04/2019 17:08

Skiptheskip - it's our first home. I will be living there for the duration of my job which is why I say at least 2 years. If I don't get a renewal I will have to leave and look elsewhere. You and other posters, have set out to accuse me and it's totally unfair when you don't know the full circumstances of my situation.

OP posts:
TeacupDrama · 30/04/2019 17:13

£280 mortgage payments are not what it would rent out for, I think it is fair, presumably your brother will continue living at home and will get no rent for 2 years
he is putting in a bit more than you, still living at home and presumably helping to pay off the 29000K I presume you put in 4k and pay 15k of the 29k and brother puts in 5k and pays 14k towards loan that is exactly fair,
you could both pay 140 of the mortgage and then you pay him half the market rent ( say its 320 per month) ie 160 you would be paying £300 a month instead of £280; so you are actually getting the best deal unless the rent for the flat would actually be less than £280 which I doubt