House buying question with this process?

[Doggit]

Once the valuations have been done, then the solicitor will have a few facts to work with. For a hypothetical example (and I could be wrong) if the flat was bought at £100K, then each brother had a 50/50 share worth £50K each, but now it's worth £150K, so the brother now sells his share for £75K, so a £75K mortgage is needed, but the daughter and her boyfriend will still be down on the new deeds as having a 50/50 share of the property' along with it's new value; unless that's drawn up as a separate document. There'll be a bit of a fudge somewhere, but the solicitors should handle it all. The only query, is making sure that the advice given to your daughter, is independent from the brothers, so there's no conflict of interest.

 

[Mottie]

From what I understand, the flat is valued at £400K, there’s approximately £340K mortgage outstanding. My daughter is simply going to replace the brother and become a 50/50 owner with her boyfriend and continue the payments (the brothers bought the flat just under two years ago). Working on the principal that if they sold up and repaid the mortgage, after estate agents and legal fees they would walk away with approx £25K each so that’s the amount she will pay to the brother. She has that put away so no further loans needed. She'll easily be accepted by the building society based on her earnings. The brother wants to get out of the mortgage fairly quickly as he has just signed a lease to rent another property with his girlfriend. Both my daughter and the brother have their own solicitors so everything including the payment to the brother will be done formally.

 

[Doggit]

Sounds like a sensible solution to everything.

 

[big-all]

dont forget the insurance for buildings and contents need to be sorted and if they are with the mortgage provider will be far more expensive than another provider

 

[Doggit]

As it's a flat, the buildings insurance will be dealt with via the management company, and the contents insurance will still be valid, as one of the brothers is still there. And of course, mortgage providers provide mortgages, not insurance.

 

[big-all]

As it's a flat, the buildings insurance will be dealt with via the management company, and the contents insurance will still be valid, as one of the brothers is still there. And of course, mortgage providers provide mortgages, not insurance.

you have to be very careful as part change off ownership is a "material change" you need to tell them about

 

[Doggit]

No, no issue in this case. If you were to buy a freehold house, you have to take out the buildings insurance as soon as you exchange contracts, but with a flat, there is a management company that does the insurance on the freehold. In this case, all you have to do (but not desperate) is to inform them of a change of ownership of the flats, as one brother still owns his share. Contents are not obligatory, as it's down to the owner if there's a problem, and they haven't bothered to take any out.