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Is this deal too good to be true ?
Comments
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As quoted developers are starting to go bust, your son should take a second charge on the property in an attempt to give himself some protection.0
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Debt_Free_Chick wrote: »If the deal is attractive, on the face of it, is there any reason why your son could not save for a deposit over the next 3-5 years
I think that he would struggle to pay the rent and save sufficient for the deposit. that was why it was attractive to get the rent back as a deposit.0 -
Jinto
That's only a cashflow problem.
e.g.
In 5 years time house is valued @ £ 200k, Developer owes your son £ 50k rental return. You (or A.N.Other) lend your son £ 50k and he obtains a £ 150k mortgage. He then repays you from the proceeds the developer owes him.
BUT, it's still too good to be true IMHO.
Thanks for the idea, but it does rely on somebody having the money to lend him for the deposit.0 -
I think that he would struggle to pay the rent and save sufficient for the deposit. that was why it was attractive to get the rent back as a deposit.
Can he really afford to live there then? Will he be able to have "contingency" savings for a mortgage? Has he done a full budget to cover all his costs?
I always get a bit nervous when things are so tight that saving is not an option.Warning ..... I'm a peri-menopausal axe-wielding maniac
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SouthCoast wrote: »As quoted developers are starting to go bust, your son should take a second charge on the property in an attempt to give himself some protection.
Yes this is a worry, I looked at possibly getting some of the equity signed over but i'm not sure that this would work. I think the property would still get grabed by the administrators and he would just end up as a minor creditor last in line for his money back after the banks.0 -
Debt_Free_Chick wrote: »Can he really afford to live there then? Will he be able to have "contingency" savings for a mortgage? Has he done a full budget to cover all his costs?
I always get a bit nervous when things are so tight that saving is not an option.
It wouldn't be that tight, but I think he would still be looking at having to save £500 plus / month over a three year period, on top of the rent and other living costs, that would be a struggle.0
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