FTB - please advise

socrates

Have you considered this option:

You say parents are lending you the money to purchase.

Why not make them your lender - visit a solicitor and get a proper agreement drawn up.

They will get more interest on their money than in any bank or building society and you will avoid loads of fees and payments towards the banks profits (when you decide to remortgage)

You would need to cover all the legal stuff like - break ups, death, inheritance, etc etc. (always best to cover the worst case scenarios)

You can also factor in future rate rises. As well as possibly giving them a charge on the property - a solicitor will have a number of other ideas too.

Someone I know has done something similar and it suits all concerned especially with interest rates on savings as they are at present.

pavlovs_dog

socrates wrote: »

Have you considered this option:

You say parents are lending you the money to purchase.

Why not make them your lender - visit a solicitor and get a proper agreement drawn up.

They will get more interest on their money than in any bank or building society and you will avoid loads of fees and payments towards the banks profits (when you decide to remortgage)

You would need to cover all the legal stuff like - break ups, death, inheritance, etc etc. (always best to cover the worst case scenarios)

You can also factor in future rate rises. As well as possibly giving them a charge on the property - a solicitor will have a number of other ideas too.

Someone I know has done something similar and it suits all concerned especially with interest rates on savings as they are at present.

Interesting idea that I'm sure they would be open to were they not hoping to move themselves in around 2 years time. There's also the sibling factor; my B&SIL are stuck in a house that is too small for their family but they cannot afford to move. It wouldn't really be fair for them to be our mortgage lendor if they could not afford to do the same for them.

There's also the moral issue. a temporary loan is one thing (even if it is an extremely large and generous one) but they are at the time of life where they should be enjoying what they have worked hard for all their lives. They've helped us enourmously over the years and I feel like we're already greatly in their debt, without actually being in their debt IYSWIM.

thank you for throwing a very interesting idea onto the table though, it's certainly food for thought

pavlovs_dog

bumping this up with another question. Something I read on another thread on here recently suggested that we'd have to have lived in the house for 6 months before we would be able to mortgage/remortgage the house.

can anyone confirm/deny this?

pavlovs_dog

well in answer to the question about financial implications for our parents this article suggests that there are no tax etc implications for a temporary loan :

There are three ways for parents to help out their children: through an outright gift, as an interest-free loan, or as an investment, but the first and last have tax implications.

the article does go on to suggest the importance of getting a legal document draw up citing what would happen to the money in the event of a death, which is something we would happily consider to give all 4 of us peace of mind.