Mortgage to repay an individual rather than a bank?

tinalives

This is a bit of an unusual situation, but I hope someone can offer some advice...

Myself & boyfriend have seen a property on the market which is perfect for us but neither of our houses are on the market yet.

Meanwhile, boyfriends parents have sold their house to downsize, and really want boyfriends house.

Boyfriend loves his house so won't even contemplate moving to anything but the right house for us.

Boyfriends parents have suggested that they buy the house we want, they move into boyfriends house and take that as part payment, boyfriend and I move into our new house, and then as soon as my house is sold, give the proceeds to boyfriends parents and we get a mortgage to repay them the remainder of the cost of our new house.

Now, I may be wrong, but I suspect that we won't be able to get a mortgage to repay boyfriends parents - does anyone know if this is the case, and if so, can anyone suggest a way around this?

Complicated one I know, but hopefully someone can help.

Thanks.

beecher

That sounds overly complicated. What's wrong with selling them the house and your boyfriend moving in with you? Then sell your own and rent if you can't find the right house at the time?

tinalives

beecher wrote: »

That sounds overly complicated. What's wrong with selling them the house and your boyfriend moving in with you? Then sell your own and rent if you can't find the right house at the time?

Because there isn't anything else on the market like the house we've seen at the price it's at, my boyfriend won't contemplate selling the house he loves without having the right house lined up for us (and rightly so), and my house isn't suitable for both of us.

We know what we want, we just want advice on how best to do it, basically, if we don't get this house we'll be staying exactly as we are (we're in no rush to move into a house we don't want!) and boyfriends parents will have to find another house to move into so that their sale can go through.

So It's the mortgage side of it I'm asking about.

Incisor

Wot beecher says. I would go one further - once in a while you see a gf with some assets and a bf and his parents who set about separating the gf from her assets.

I have a suspicious mind. Doing it this way means that the bf can retain his name on the deeds of his present house, parents have name on deeds of your future house, you hand of proceeds of sale of yours and putting your names on the deeds of the new house gets conveniently forgotten [Oh yes, we'll pay the solicitor, you leave it to us ... ] then you split up about 18 months later, but you have your name on nothing.

How much equity do you have in your house? Take this seriously, this does not look right and it could damage you badly.

getmore4less

The first thing to check is will the numbers stack up.

New house less value of BF and realistic value of yours, can you get/afford a mortgage for whats left.

Thats the first affordability hurdle.

Now if you can't sell yours can you afford the mortgage then.

Thats the next afforability hurdle.

Can you rent your place to cover the costs, if not can you afford the subsidy for that on top of the mortgage.

....

Why not buy the place with borrowed money from the BF parents as a debt and miss out the middle men pay them the interest they could get as savings

Thats what close/extended families do.

There are tax implications for the parents but you can work round these.

tinalives

getmore4less wrote: »

The first thing to check is will the numbers stack up.

New house less value of BF and realistic value of yours, can you get/afford a mortgage for whats left.

Thats the first affordability hurdle.

Now if you can't sell yours can you afford the mortgage then.

Thats the next afforability hurdle.

Can you rent your place to cover the costs, if not can you afford the subsidy for that on top of the mortgage.

....

Why not buy the place with borrowe money from the BF parents as a debt and miss out the middle men pay them the interest they could get as savings

Thats what close/extended families do.

There are tax implications for the parents but you can work round these.

Thanks for your reply.

We can afford the mortgage on the new place if we sell both our houses, but not just one of them. Alot of houses are currently available for rent in my area so it appears the market's pretty saturated, and I'd need constant guaranteed income to be able to afford to pay my mortgage as well as the mortgage on our new house.

Initially his parents did suggest that they lend us the money and we pay them back without interest - but I don't think they'd really thought it through, and the last I'd heard before they went on holiday was that they'd buy the house for us and we'd have to get a mortgage to pay them the balance.

I completely understand them getting cold feet about it because it's such alot of money, and it's their retirement.

tinalives

Incisor wrote: »

Wot beecher says. I would go one further - once in a while you see a gf with some assets and a bf and his parents who set about separating the gf from her assets.

I have a suspicious mind. Doing it this way means that the bf can retain his name on the deeds of his present house, parents have name on deeds of your future house, you hand of proceeds of sale of yours and putting your names on the deeds of the new house gets conveniently forgotten [Oh yes, we'll pay the solicitor, you leave it to us ... ] then you split up about 18 months later, but you have your name on nothing.

How much equity do you have in your house? Take this seriously, this does not look right and it could damage you badly.

Thanks for your reply.

I don't for one minute think there's anything sinister in it. I think all parties will have to make sure they are happy before we go ahead with anything.

I don't take giving up my indpendence lightly, let alone giving up my house. That's why I'm trying to find out as much as possible at this stage, before anything goes any further.

Incisor

tinalives wrote: »

Thanks for your reply.

I don't for one minute think there's anything sinister in it. I think all parties will have to make sure they are happy before we go ahead with anything.

I don't take giving up my indpendence lightly, let alone giving up my house. That's why I'm trying to find out as much as possible at this stage, before anything goes any further.

Then when yours sells, leave the money with your solicitor until you get you name on the deeds of something. Yes, I would accept that the suggestion could just be half thought through, but I do remember a similar thread here 6? weeks ago where the proposals didn't look right.

tinalives

Incisor wrote: »

Then when yours sells, leave the money with your solicitor until you get you name on the deeds of something. Yes, I would accept that the suggestion could just be half thought through, but I do remember a similar thread here 6? weeks ago where the proposals didn't look right.

Thanks,

I'll make sure it's all covered.

getmore4less

tinalives wrote: »

Thanks for your reply.

We can afford the mortgage on the new place if we sell both our houses, but not just one of them. Alot of houses are currently available for rent in my area so it appears the market's pretty saturated, and I'd need constant guaranteed income to be able to afford to pay my mortgage as well as the mortgage on our new house.

Initially his parents did suggest that they lend us the money and we pay them back without interest - but I don't think they'd really thought it through, and the last I'd heard before they went on holiday was that they'd buy the house for us and we'd have to get a mortgage to pay them the balance.

I completely understand them getting cold feet about it because it's such alot of money, and it's their retirement.

Looks to me the sale of your place it critical since the rental looks shakey.

Also the parents need somewhere to live to make sure their sale goes through even if they have to rent for a bit, losing a sale now would be silly.

Is your place just not big enough for two in the short term while you try to sell it.

Also are you really sure this new place is the one, the only one.


Back to the question,

If they(parents) buy the place then you(couple) will not be able to get a motgage on it without change of ownership which you would want.

If the plan is to buy a place together then why not put your place up for sale and move in with him till the next dream home comes up, price yours right and get a quick sale and the current dream home may still be available.

tinalives

getmore4less wrote: »

Looks to me the sale of your place it critical since the rental looks shakey.

Also the parents need somewhere to live to make sure their sale goes through even if they have to rent for a bit, losing a sale now would be silly.

Is your place just not big enough for two in the short term while you try to sell it.

Also are you really sure this new place is the one, the only one.


Back to the question,

If they(parents) buy the place then you(couple) will not be able to get a motgage on it without change of ownership which you would want.

If the plan is to buy a place together then why not put your place up for sale and move in with him till the next dream home comes up, price yours right and get a quick sale and the current dream home may still be available.

There are lots of issues regarding where we can and can't live and why we're doing what we're doing - but that's not the issue and I'm not asking for anything to be resolved there.

His parents are happy to wait for my place to sell before they get the money from it.