I was made an offer of selling my apartment for €100,000. I bought the apartment in January this year for €200,000.

Equity release

The apartment would be mine to live in while I live. All maintenance would be seen to by the buyer. If I go into a retirement home, the apartment could be rented and the money would be mine. As I know nothing of such procedures, I am trusting you will be able to enlighten me on the dangers of such matters.

Ms F.D., Limerick

You do not say whether the approach you have received comes from a company specialising in such arrangements or an individual, but, in any case, all of these arrangements carry a major health warning.

The first and most important thing I would say to you is that you absolutely have to consult a solicitor before proceeding any further with such a proposal. Why? Because the terms of any agreement you have with the purchaser will only be as watertight as the contract you both sign.

While I am not suggesting that the purchaser in this case would take advantage of an elderly homeowner, such things have happened more than once in the past.

Generally, they can be traced back to people signing contracts they either did not fully understand or accepting reassurances from purchasers on issues that are not specifically covered in the contract only to find out later that such reassurances count for nothing in court.

For all these reasons, legal advice is a must. I know people can balk at the cost of such advice, but when you consider you are negotiating on what is probably your major financial asset, going it alone would be a false economy.

On the broader issue of such transactions, I am resolutely against them except for people who are having trouble finding enough cash to meet their basic needs on a day-to-day basis.

There are three companies, to my knowledge, that specialise in this business, using two separate models.

Bank of Ireland offers loans to elderly homeowners secured on their homes. They expect no payments during your lifetime but interest builds up at an agreed rate and the full sum is due when you pass on. As I understand it, depending on how long you live, the debt can equal but not exceed the full value of the home.

The second type is closer to what you are talking about. This is where you are paid a flat sum for a portion of your home and two companies - Residential Reversions and Shared Home Investment Plan (SHIP) - work in this space.

Again, when you die, the company owns that portion of your home and recovers its money from the sale of the property.

Generally, such companies will pay half the value of the portion of the property they are buying to reflect the risk they are taking in deferring repayment until you pass on.

Given that such transactions are generally open only to people aged 70 and over and that the average Irish person survives to less than 77. This strikes me as a very poor deal.

However, neither of these provides for the sort of deal you are talking about which:

a) buys the full house and allows you to remain, essentially as a sitting tenant.

b) provides a method of meeting subsequent nursing-home costs, if necessary.

There are several issues that come to mind. First, given that you only purchased this flat earlier this year, are your financial circumstances so straitened that you need to release cash from the property?

What happens if, should you require nursing home care, the purchaser cannot rent the property and therefore receives no rental income to help defray your care costs?

Who decides what maintenance is required and what is simply cosmetic?

What are the motives of the proposed purchaser (because they are highly unlikely to be, primarily, interest for your welfare)?

Is your house in such a key position that an individual (for it sounds to me like an individual) would want to pre-empt any future sale and, if so, why?

Finally, did the proposed purchaser approach you or did you go looking for a way to release equity from the property?

This last one is critical in my view in making up your mind. If you did not feel the need for this €100,000 in ready cash before this deal came along, then you probably do not need it now and should shun the proposal. See a lawyer.

Joint mortgage

My brother, who now lives abroad, bought a house in 2000 in which I currently live and on which he still pays a mortgage. I am looking to get on the property ladder and as I cannot afford to buy a house on my own, and he would like to free up some of his investment, he has offered to allow me to buy half his house and become joint owners of the property.

Can you advise as to how we do this from a mortgage point of view? Can I take out my own mortgage for half the value of the house (estimated at €150,000), which he can then use to reduce his own mortgage or will we have cancel his current mortgage and start a new one together?

Ms C.O'M., email

I am assured that there are two options open to you in a situation like this, although both of them amount to much the same thing in essence.

The major issue is that you cannot have an asset acting as security to two different loans.

When your brother took out the mortgage on the property, he lodged the deeds with the mortgage provider as security. If he were to fail to deliver on the loan, the lender has rights over the whole property.

In that situation, no lender is going to offer you a mortgage for half the value for the property, as you have no deeds to offer as security. The deeds cannot be lodged as security for two separate financial arrangements.

However, there are ways around it. The first sounds the simplest in some ways.

You can transfer the ownership of the property from one name to joint names. This would continue the current mortgage and save on certain legal costs.

However, as your brother has been paying the mortgage for the last four years, you would have to work out between you how to split the payments so that you would both pay the same over the life of the mortgage.

The key element is that no matter who is paying what - you could have an arrangement for you to pay 60 per cent of the monthly payments and your brother 40 per cent until your investment levels up - you would still each be held individually and jointly liable for any missed payments or problems with the mortgage.

The second option, which contains the same legal stricture, would be to close the current mortgage and start afresh.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, D'Olier Street, Dublin 2 or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.