Advise on cost of buying, cost of selling, legal agreement

kala85

I am thinking of buying a house with one of my siblings. I need to find out information about having a legal agreement in place in case anything happens or one of us wishes to break from the mortgage down the line. Also I need to check about the costs of purchasing fees and selling fees.

We would be both contributing equally to the deposit on the house, both be living in it together and maybe rent out a room as well. The monthly repayment does not look too bad at the moment ( just from internet calculators) - spread over 30 years its what one of us is currrently paying in rent (or half of what we each pay in rent) so we might actually save money maybe. Are we better off having a shorter term on the mortgage.I want to keep the repayments reasonably small if possible and then save a bit on the side in order to pay the mortgage off quicker. Also small repayments will mean that we will not be over burdened.

I need to find out
1.what are the implications for getting a mortgage ( both of us in permanent state jobs)
2.what would be the initial costs for buying the house
3.what would be the fee in setting up a solicitors legal agreement ,would it be necessary. Would it be necessary for the bank?
4. what is the best way to set up the agreement so that we could part on good terms if we decide to sell it later?
5. What would be the cost in selling the house later on?
6. Whats the situation with regards to interest relief and first time buyers grants etc. Would each of us lose out here as well.
7. What would happen with regard to buying a second home later on when we want to buy our own house and settle down and we are applying for a mortgage in our own names. How would this mortgage affect this application

The house would be a good starter property for both of us, but still if let out to rent, the mortgage would be covered hopefully by any future tenants.

What other pitfalls can you see?
With regard to the recession and euro situation what might happen into the future?? Is now a good time to buy?

Sorry for all the questions, just trying to find out as much information as possible.

bee06

kala85 wrote: »

1.what are the implications for getting a mortgage ( both of us in permanent state jobs)
2.what would be the initial costs for buying the house
3.what would be the fee in setting up a solicitors legal agreement ,would it be necessary. Would it be necessary for the bank?
4. what is the best way to set up the agreement so that we could part on good terms if we decide to sell it later?
5. What would be the cost in selling the house later on?
6. Whats the situation with regards to interest relief and first time buyers grants etc. Would each of us lose out here as well.
7. What would happen with regard to buying a second home later on when we want to buy our own house and settle down and we are applying for a mortgage in our own names. How would this mortgage affect this application

My advice is based on my own personal experience...
1. Implications would be you have a commitment to pay this amount back to the back plus interest. Interest rates can increase and as a result your repayments will increase.
2. Initial costs are solicitors fees including outlays (mortgage registration, searches etc), survey, home insurance, life insurance
3. Fees depend on the solicitor, get quotes from a few different solicitors especially ones people you know recommend.
4. I don't have any experience with legal agreements for joint purchases so will let someone more knowledgeable answer that one.
5. Never sold but estate agents fees and again solicitors fees would be the main ones.
6. Mortgage interest relief ended at the end of 2012 so won't apply. I'm not aware of any first time buyer grants.
7. I'm in the middle of this process myself at the moment. Every bank treats it differently but they will take into account the fact that you have an existing mortgage when deciding how much you would be able to borrow on the second mortgage. For example, BOI assume that you will be paying both mortgages. They don't take into account any rental income either so an existing mortgage could seriously impact your chances of getting a second one.

Based on my own personal experience now I think if I could do it over again I'd only tie myself into a mortgage for the house I knew I was going to spend the rest of my life in. But of course I bought in 2008 and am now in negative equity. Owning a property that you plan to rent out (if you don't live in it) does involve a lot of extra complications that you may not realise such as tax on rental income, registration with PTSB, actually dealing with tenants etc. It's not as simple as the rent covers the mortgage so it's grand.

Hope this helps

Strong arm

You can enter into an agreement with your sibling which covers every eventuality - your solicitor will be able to provide you with one( for an extra cost) but will also advise one of you to get Independent advice before signing it

kala85

Thanks for the advice i have received here.