Taking equity?

kennyboy66_2

Graham_Devon wrote: »

There would definately be financial advice, however, just nice to know what others think.

Would it be possible for myself to buy a share in the house? Thinking of tax implications etc?

They own the home, could I buy 10% for instance? That way, no interest, I'm making an investment, and I should get the stake back at the end of it (in a fairly morbid kind of way!), they get the money they would like to do a few things.

I really am clueless when it comes to this sort of stuff.

I think this is the route I would go down. Obviously everyones circumstances are different, but provided you can afford it, that's what I would do.

zzzLazyDaisy

Graham_Devon wrote: »

Would it be possible for myself to buy a share in the house? Thinking of tax implications etc?

Yes it is possible to buy a stake in the house, but there would be fees for registering your interest, and potential CGT implications (although prices would have to rise a long way, bearing in mind the annual CGT exemption).

An alternative way to do it would be for you to loan them the money, with a simple agreement drawn up, and for them to amend their wills to ensure that the loan is repaid before the balance of the estate is split between you and your sister. It would not be unreasonable in that situation for the agreement to reflect the interest you would have earned had you had the money in savings during that time. If your sister is likely to be difficult about this, you can always attach a photocopy of the cheque/bankstatement to the loan agreement.

Graham_Devon

Really2 wrote: »

Yes you could buy all of it if you like, just have to get the documentation done through a solicitor.

I would do it so say you pay 10% (Say £30K) you get back 10% or £30K which ever is the highest (that will cover you for any poential price falls).

It is the most sensible thing all round providing you have the spare cash.

Well it would be an investment from my point of view, in inheritance terms, plus they could still move 10 years later and the interest has not eaten another 20-50k out of their money.

Don't really want to do it, but if it means they didnt go down the equity route, I'd prefer personally to do that and treat it as an investment for myself....as theres not many investments where you can put in say 25k and get back a house at some point.

Cool, worth thinking about. Cheers.

chucky

i wouldn't use the equity people. your parents future and your families future is then somewhat controlled by their rules.

buying a stake in the property is the best option but this opens a can of worms with other family members as your intentions can easily be mis-interpreted unfortunately.

to be fair if i was your parents. i'd rather use my son/daughter than use one of these companies as their intentions are not the same of what you would want for your parents.

Generali

Get yourself over to the mortgages board old chap. They'll have a much better idea about these things.

It's probably a good idea for your parents to do this if they're old and if they chose the right product. If they decide to go ahead then feel free to PM me the T&Cs. I read small print for a living!

bo_drinker

Graham_Devon wrote: »

Well it would be an investment from my point of view, in inheritance terms, plus they could still move 10 years later and the interest has not eaten another 20-50k out of their money.

Don't really want to do it, but if it means they didnt go down the equity route, I'd prefer personally to do that and treat it as an investment for myself....as theres not many investments where you can put in say 25k and get back a house at some point.

Cool, worth thinking about. Cheers.

What about your sister??

Graham_Devon

bo_drinker wrote: »

What about your sister??

She would get half of the 90% left over.

Really2

Graham_Devon wrote: »

She would get half of the 90% left over.

Other option is she could chip in half of the 10%, That would stop her worrying about her stake.

Graham_Devon

Really2 wrote: »

Other option is she could chip in half of the 10%, That would stop her worrying about her stake.

She'd be mortified at the thought of chipping in for a drink, let alone a house!

Might not do anything like this, it's just they are starting to convince themselves, and personally, alarm bells rang when I heard of their plans, so thought I needed abit more info. Isn't going to happen for a couple of years.

michaels

If you make them an unsecured loan and they later withdraw all the equity from the house (may be your sister has a 'crisis' and they bail her out?!) then there may never be any assets left for you to get your repayment.