Buying a house with my brother

tenchi-fan · 17 Sep 2006 at 18:25

I was a part-qualified accountant before I decided I couldn't hack it and left the job I was in. After 18 mths of being independent I'm now back living at home and fell back into the rut. My dad nags constantly... I'm 24 and that just isn't a good way to live!

I don't want to dive into another career - seems to me I've hated every "real" job I've ever worked in. So I was thinking of applying to a call centre. Wages are €20,000 + overtime. Nothing special, and definitely not enough to get a mortgage with.

My brother and I were talking about moving out of home and renting, but of course rent payments and mortgage repayments are more or less identical so now we're talking about buying a property together if we can swing a mortgage. He's 20 and a second year apprentice on a pretty poor training wage.

Dad's going nuts because he wants us to wait another year or two (or three), go the career route and buy separate houses. Trouble is I can't hack living at home and I don't want to feel trapped in a career - if I was a homeowner I wouldn't have simply been able to pack in my last job so easily and I had got into a habit of drinking a lot after work and weighed almost 13 stone (compared with 11.5 since I left work!)... can't be good for my health.

So people, pro's and cons of buying a house with your little brother? Has any one done it, and if so would you recommend it?

Kell_ee001 · 17 Sep 2006 at 18:27

tenchi-fan said:
So people, pro's and cons of buying a house with your little brother? Has any one done it, and if so would you recommend it?

Main thing that occurs to me is - do you 2 get on well and can you rely on eachother financially?

tenchi-fan · 17 Sep 2006 at 18:35

Ah we get on great. We're talking about turning the living room into a shebeen (pub) and joining the gym together and everything. He's a bit lazy though - doesn't like cleaning up after himself. that's probably the only problem.

Kell_ee001 · 17 Sep 2006 at 18:55

Well you need to talk about whether you can live together without the parents (they won't be there to make him tidy up for example). Discuss what would happen if one of you met someone and wanted to move in with them etc.

If you can work out these things then speak to a personal adviser and see how large a mortgage you can get - take it from there.

I know I love my little sister to bits but if it were just the 2 of us in a place we'd soon be at eachothers throats

aardvark · 17 Sep 2006 at 19:56

no way would i buy a house now - everybody agrees they are overvalued at the moment and will at some point suffer a market correction - and its looking soon as the US market is about to crash.

it makes a lot more financial sense to rent (and a number of friends were told this by financial experts very recently)

Usel · 17 Sep 2006 at 20:14

aardvark said:
it makes a lot more financial sense to rent (and a number of friends were told this by financial experts very recently)

But they have been saying this for the last 5 years or more though.

Even if there is a crash of some sort I can't see first time buyers properties dropping by that much. I personally know 15+ friends with large deposits in the bank waiting for house prices to fall so they can quality for the mortgage needed.

If properties at the £120,000 mark drop down to £90,000 there will be people tripping over themselves to buy.

**** To the OP *****

If you do plan on buying with your brother setup everything as if he is a complete stranger and put it into a contract. So many people start up business etc.... thinking they'll never stab me in the back were family!

Steeps · 17 Sep 2006 at 20:21

Usel said:
If properties at the £120,000 mark drop down to £90,000 there will be people tripping over themselves to buy.

is that not the exact reason why the properties are as high as they are?

Glaucus · 17 Sep 2006 at 20:22

aardvark said:
no way would i buy a house now - everybody agrees they are overvalued at the moment and will at some point suffer a market correction

Load of rubbish. It's simple supply and demand. Where 300k houses short ATM, until we build that many which isn't going to be soon. Then there wont be a crash.

Usel · 17 Sep 2006 at 20:32

Steeps said:
is that not the exact reason why the properties are as high as they are?

Yeah and that's why I don't think there will be a huge crash (which will effect first time buyer properties) and that the OP should be safe in buying a house now.

tenchi-fan · 17 Sep 2006 at 23:46

Usel said:
Yeah and that's why I don't think there will be a huge crash (which will effect first time buyer properties) and that the OP should be safe in buying a house now.

For the last ten years people have been saying houses are overvalued and will fall... my gran bought her house 9 years ago for €82,500 and it's now worth €250,000+... big difference! I personally would regret renting for 10 years only to own absolutely nothing at the end of it. Then again, I am a little worried at how much house prices have risen in the last 12 months... some 3 bed houses went up by as much as €50,000. So house prices are still rising but even if they level out in the next 2 years I still can't see myself being out of pocket. Only thing that I'm worried about is losing the first time buyers allowance (in Ireland). Because we're buying together both of us will be using our first time buyers stamp duty exemption. Ah well, small price to pay to get our feet on the property ladder!

McDaniel · 17 Sep 2006 at 23:51

Would you not be better off renting a place together rather then tieing yourselves down with a mortgage.

P.S - Call Centre work is mind numbingly boring, which if your like me makes you eat when you are bored - thats how i put on a bit of weight

Homer-Simpson · 17 Sep 2006 at 23:58

I wouldn't buy a house straight away if you have never lived with eachother (without your parents being there however this is just my opinion). Personally I would rent a house with him for a few months just to make sure you can live with eachother as it could be an expensive mistake if you can't

tenchi-fan · 18 Sep 2006 at 00:04

McDaniel said:
Would you not be better off renting a place together rather then tieing yourselves down with a mortgage.

I know what you mean about being tied down, but as house prices are still rising odds are in two years time we'll at least be able to cover legal and other expenses and maybe even realise a profit.

McDaniel said:
P.S - Call Centre work is mind numbingly boring, which if your like me makes you eat when you are bored - thats how i put on a bit of weight

I used to be an accountant (well part-qualified!)... you don't know the meaning of the word boring! In any accounting job I did I really didn't consider any of my colleagues as friends, but in call centres there's a young enough crowd and it's meant to be really good craic. And you really don't take your work home with you - I find with accounting I can be stressing a lot.

bam0 · 18 Sep 2006 at 00:18

aardvark said:
no way would i buy a house now - everybody agrees they are overvalued at the moment and will at some point suffer a market correction - and its looking soon as the US market is about to crash.

it makes a lot more financial sense to rent (and a number of friends were told this by financial experts very recently)

"Everyone" was saying the same thing when I bought a house 2.5 years ago. For me to be bothered by a house price drop it'd have to first lose the value" it's gained since I bought it, then it would have to lose the value of rent over the time i've had it for me to be in an equivalent position to if I had rented all that time.
Every month that goes by is another £1000 I didn't throw away renting and another £1000 my house would have to lose in value before renting over the same time period would have been the better choice.

PsiFox · 18 Sep 2006 at 09:16

Do a search on joint mortgages.

Some info here

http://www.sharetobuy.com/information/joint-mortgage.php

aardvark · 18 Sep 2006 at 09:19

house prices all over the world are overvalued and a danger to the world economy - the IMF said that just a few days ago.
Economies come in cycles and we are at the top of one - i think its only going to get bad from here - thats just my opinion, you don't have to believe me.

Visage · 18 Sep 2006 at 09:26

aardvark said:
house prices all over the world are overvalued and a danger to the world economy - the IMF said that just a few days ago.
Economies come in cycles and we are at the top of one - i think its only going to get bad from here - thats just my opinion, you don't have to believe me.

What would you say to the people who were saying exactly the same as yourself 5 years ago?

aardvark · 18 Sep 2006 at 09:34

Visage said:
What would you say to the people who were saying exactly the same as yourself 5 years ago?

well, there should have been a recession when the stock market had its correction a few years ago but they 'stopped' (ie. delayed) that by increasing the money supply and incresing debt - and that fueled the housing market. But that cannot continue indefinitely, its impossible, as the US is now finding out - their housing market is starting to crash right now, and we are in a worse position than them (economically). The US will probably fall into recession which means we will too.

crashes happen, all the time and everywhere - its time for ours.

wesley · 18 Sep 2006 at 09:49

joint mortgage with your brother can be bad idea, what if he got girlfriend living with him and want you out? or they move out to get their own place, can you afford paying of the mortgage on your own, etc etc. can cause many problems, IMO

tenchi-fan · 18 Sep 2006 at 10:41

wesley said:
joint mortgage with your brother can be bad idea, what if he got girlfriend living with him and want you out? or they move out to get their own place, can you afford paying of the mortgage on your own, etc etc. can cause many problems, IMO

That's probably one of the few things that we're going to have to put in writing... NO other halves are to move in. As well as it being uncomfortable for the other owner feeling like a third wheel/stranger in their own home, and issues with sharing of bills and rent, recent court rulings say that if a couple are living together with no rental agreements in place, in the event of a breakup the other half may be able to claim her "share" of the property.

Aardvark, I suppose you're right about it being time for a crash... however, the town I live in is pretty vibrant at the moment so I think we'll get a heads-up in the form of house prices slowing down first. Whether we would act on this (by selling up and waiting for a good crash before buying again) is another story... when people are settled in it's hard to just take the initiative to move. Also, although only part-qualified I can always go back to (gulp) accounting if I need the money and my bro will be a carpenter... so (touch wood - pardon the pun) no shortage of money. The only thing bothering me is the thought of paying off a €220,000 mortgage for a house only worth €175,000.

I suppose we could set a time frame like 24 months, after which we weigh up all the pros and cons and consider selling.