Inheritance worry

[UselessFecker]

My dad died recently leaving his house to me and my 2 brothers. One brother is saying they want to buy us out and live in dad's house. He is planning on doing this by releasing equity on his house (and then renting his house out).

Is this a possibility assuming he could get enough equity from his house?

Of course it is, as long as you all agree to sell at a price youre all happy with.

Presumably the alternative is selling on the open market.

Yes as long as all parties are in agreement and are offered a fair price

I'm not sure how he plans to release equity as the majority of Equity Release Companies will not release money if there is a tenant in situ.

Shouldn't be a problem. He could always raise a mortgage on the inherited houses. His one third share would be the deposit

Of course. My closest friend was fortunate to recently be a part of a fairly large inheritance. It is split with her three brothers and involved two properties and a large amount of cash. The house she lives in is one of the properties. They had it independently valued and she is taking it as her quarter of the estate. Her two brothers are the executors.

If he plans to use an equity release mortgage, he has no chance! They are also extremely expensive. My mum borrowed £18k in 2017, its now gone up to almost £50k.

Wouldn’t it be better to remortgage his current home?

I think this, along with converting his existing mortgage if he has one on his current home to a BTL would be the appropriate way to go.

The OP talks about 'releasing equity' but this doesn't need to be an equity release mortgage where no payments are made and there's no set end period if the DB is still of working age and plans to pay down the mortgage as normal.

You and sibling could agree to act as mortgagees to the extent he cannot raise 2/3 of the value and assuming you don’t need your interests bought out for cash immediately. You just need a repayment plan with him and also a binding agreement under deed.

He will pay SDLT on the 2/3 bought out.