Would you accept help from a relative?

kunekune

We have been househunting more seriously since interest rates came down - as we are able to get a good mortgage deal at base rate, we've taken the approach that if we find the right house at a good price, it's worth taking the plunge.

So far, we have treated our maximum offer as 175K. That's because the mortgage that would involve is one we can afford at standard mortgage rates, on one income, and without making any real cutbacks to living standards. We're being cautious because OH has a progressive medical condition and we don't know how long he will be able to work (especially as he is with a bank). However, my FIL has now offered us some additional money.

On the one hand, I am reluctant to take help from the parental generation. We're grown ups and managing. Also, if we had behaved more sensibly in the past, we would be much more financially secure now, so it is kind of our own fault. We're putting it right, but I feel some pride in that, and taking help might dent our pride. On the other hand, this is the kind of help that is an 'advance' on what will come in the future, but at a time when it could make quite a difference. If we say yes, we can increase our maximum offer by about 10K and also reduce the amount we borrow - since that would mean it was all at the specially low rate, that would mean another £200 a month in overpayments for so long as OH is working. The overpayments are a safety net in that (a) they improve our LTR ahead of any need to refinance and (b) when that refinance occurs, we owe as little as possible.

The other aspect to this is that the house we really want - the one that will see us through to retirement, in all likelihood, even if the children never leave - is currently above our max price, but wouldn't be with the extra money. It would also be big enough for FIL to visit in comfort!!! We'd still have to negotiate hard to get the house at a fair price, but at least we'd be in with a fighting chance ... and psychologically, I think that showing we'll go over the stamp duty figure shows that we are serious.

Would you swallow your pride and say yes?

silvercar

I was with you until the last (big) paragraph. Shame to take the money and then waste a lot of it on stamp duty.

kunekune

The house is on at 209, and the chances of getting it for less than 175 are zilch. Though we'd try! We wouldn't go above 185. But it's not quite the same as offering 180 on a property priced at 185. I totally agree there that the tax is a waste of money. But it's hard to avoid once you hit a certain price bracket.

silvercar

So lets say you get it for 185k. Stamp duty takes £1,850, leaving you with £8,150. How much extra does this cost you monthly on the mortgage compared with buying at 175k with no help?

genny

Yes. I'd always help my family out if I could, it's what families are for - feel yourself lucky to have such a caring family.

JayZed

I would have no hesitation or guilt about taking parental help. We did so with our first purchase, and without it we probably wouldn't have been able to get on the ladder at all (we're now on our second home, and much more financially secure than we were then).

I don't think that accepting this help should dent your pride - saving up £28K for a deposit is a substantial achievement. I'm sure your FIL is more than happy to help, and you'll be paying it on in a few years when your kids are struggling to buy their first homes.

It's a shame to go above the stamp duty threshold if you can avoid it, but if it really makes the difference and enables you to get a house that you're going to stay in until retirement, then it's probably worth it, as you avoid the cost of subsequent moves.

Robert_Sterling_3

Good parents want to help their children.
Accept the offer.

kunekune

Silvercar, if we paid 185K, the mortgage would be 12K less than if we bout for 170K and didn't have the help, which means that the entire mortgage would be at 1%, so the monthly savings would be the interest at 4.5% (now 4%?) on 12K.

Thanks for the kind support, I'm not used to getting help, my family has never given any (and never will), so it's not an attitude I've grown up used to.

kunekune

Jayzed, thanks for saying that! When we arrived back in the UK 2 1/2 years ago, we really had nothing, and had to set up the household again from scratch. So I am quite proud of the escalating savings rate! It could be more, there's still plenty of fat in the budget, but the main thing was to prove to myself we could live on one income, and that's what we've been doing the last few months.

liz-paul

Yep if my parents could afford to help us out financially with something like this I would take the money with no guilt/dent in pride at all.

Lotus-eater

When I was younger I turned down help like this and was very proud of myself for standing on my own two feet. I'm older now (maybe a bit wiser) and would accept help with only a slight twinge to my pride

Everyone makes mistakes, you have admitted you haven't been good with money in the past and good for you for doing that. Everyone is also allowed to receive help from people who love you.
Take the money in the way it is being given, with love and you and your family in mind.

Get the house under SD though