Parents buying me a house......

geordie_ben

picardygirl wrote: »

Is she a homeowner with a mortgage?

No she rents

BritRael

owitemisermusa wrote: »

Who will pay their rent?
Is there any outstanding mortgage on the house currently?
Why not move into the family home and they move into rental. Isn't that the easiest thing to do?
HTH.

Beat me to it!

picardygirl

geordie_ben wrote: »

No she rents

Can they lend her £100k interest free to purchase a property too?

geordie_ben

No, and its propably not going to be interest free, but even if it is, my parents would rather I and possibly my sister had an easy route onto the ladder and save us 10's of thousands of pounds by not getting a part/full mortgage

isitenough

What happens if you lose your job/income? Normally with a mortgage you can get MPI to cover these things but without one who pays?

Doozergirl

geordie_ben wrote: »

Doozergirl I appreciate your comment but I think it is stemming away from my main thread.....

Not really. We're somewhere in between them lending you the deposit money and them lending money to buy you a place outright. Which is it exactly and what is the motivation behind it so that we can give advice accordingly. Obviously for you the best option is that they give you all the money and you pay them back without interest over 12 years. However that would be an insane move for your parents. We need to know their motivation.

Presumably part of the reason you want to buy is that you don't want the insecurities of renting. Your parents need that security more than you do as they get older. The best option for everyone is that they lend you the deposit money. If they are knocking on they really need to have security of tenure, far more than you do. Lending the moeny on the basis that you might be able to raise a mortgage in 2 or 3 years is a massive risk.

geordie_ben

isitenough wrote: »

What happens if you lose your job/income? Normally with a mortgage you can get MPI to cover these things but without one who pays?

Thats one of the things we know we need to look into, can MPI be bought seperately for this type of situation?

picardygirl

I totally agree, if we are in the position when my children get to the house buying stage if we could help them we would (definitely wont be selling our family home to do it though).

My point being about your sister, if they lend a significant amount of money to you to purchase a property, interest free or at a very low rate, dont count on your sister just rolling over and saying she's ok about that, i wouldnt be! If i couldnt help both my children i wouldnt favour one of them ...... sorry buts that my opinion - and obviously i know nothing of your family or circumstances.

Fly_Baby

geordie_ben wrote: »

No, and its propably not going to be interest free, but even if it is, my parents would rather I and possibly my sister had an easy route onto the ladder and save us 10's of thousands of pounds by not getting a part/full mortgage

How is your sister is going to benefit? If she is renting too but you are getting all the help it's not fair on her.

mlz1413

geordie_ben wrote: »

Me and my parents are looking into them selling our current family home and lending me some/all of the money to buy myself a house

If I borrwed most of the money they would move into rented accom

I would then pay my parents back instead of getting a mortgage

We've only literally just started thinking about it and are unsure of the options available



We've thought some of the options could be

• Lending the money until it was all paid back (£100,000 in 12 years) do not bank on the 5% interest, hence it is 16.67 years @ £500 pm repayments.
• IMO 12 or more years is too long as this is not spare cash to your family
• Lending the money for 2 or 3 years, paying off as much as possible, then getting a mortgage when they wanted the money back A better idea as long as an end date is set and adhered to.
• Lending the money to buy myself a house, then when they wanted to buy again, i would take the mortgage out and they would like in the 2nd house NO, cross ownership and rental to family is a problem.
• Lending a smaller amount of money as a deposit and getting a mortgage myself IMO this is the best option, it would also be good if the same value offered to you could be offered to your sister

Has anyone ever done something like this?
What are the pro's and con's Pro's you get a cheap loan, con's could be many depends on the future
Anyone know the legal side? You will need legal advise and contracts drawn up.

I have an older sister and obviously my parents aren't getting any younger so we'd also need to think of what would need to happen when they pass away, or if i passed away before the money was fully paid back - very true, ensure you get legal advise on this too.

Any help would be great!!

Above in blue are my thoughts