Buying (part) of house for Mother-in-Law

tocadast

My Mother in Law currently lives in a house worth IRO £125k. She wants to move closer to us but a slightly smaller "decent" house will cost about £150k. We have plenty of equity in our house and my wife has an endowment policy (not linked to this or any other house/mortgage) looking to return about £50k in 15 years time.

Can anyone suggest the most efficient way to help MiL finance her house move.

Many thanks

UK_Landlord_2

your actually helping the mother inlaw move closer :eek: only joking my mother in law is great too. but then she does live 1,000 mile away....

not really sure what you mean by efficent way? surely she could just get a small mortgage/mortgage increase to fund the difference, borrowing only 25k is not that expensive.

robwend

uk you beat me to it...the mans mad

clairehi

have you considered letting her place and renting her a house nearer to you if purchase prices are prohibitive ?

you dont say how old she is/whether she has any income.
Im not sure how easy it is to get a mortgage on such a small amount anyway.

the other option you are hinting at is remortgaging your place in order to fund the difference between her equity and purchase price - making her a cash buyer. you could get an interest only loan on the difference over 15 years and pay off the capital when the endowment matures. I guess you probably need to talk to an IFA with full details to see if this would be the best option, and a solicitor to protect your investment legally? cant speak from experience here though.

tocadast

Mother in Law is lovely lady....wouldn't have considered this at all for my ex's mother!!

I don't think she'd want the hassle of renting her place out at her age and unfortunately we don't have much time to look after that side of things for her.

MiL has no income, she's retired. Clairehi picked up on what we were thinking of doing anyway except that we were also considering the possibility of getting the mortgage on her new property and using the endowment to pay THAT when it matures. Looks like financial advisor and solicitor could be next ports of call.

Thanks for taking the time to respond.

clairehi

tocadast wrote:

Mother in Law is lovely lady....wouldn't have considered this at all for my ex's mother!!

I don't think she'd want the hassle of renting her place out at her age and unfortunately we don't have much time to look after that side of things for her.
.

yes,I thought you might say that - fair enough.

I assume youve got enough income to afford the increased mortgage payments?

and who's going to end up doing the DIY/lawn mowing at her new place ... dont say you havent been warned!

moneysavingobsessive

A really cunning way would be to stooze it - but instead of saving the cash, use it to buy the house. 25k is certainly possible on credit cards if you juggle it around a bit and have decent credit history - this would then be at 0%, although with a 2% minimum payment, you would be looking at 500pcm minimum payment!