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How to help our son.
LULULU1
Posts: 462 Forumite
Hi,
Our son and his girlfriend are looking to purchase or rent a property. We are trying to find the best way to help them. He works and she doesn`t at present. We have approx 20k deposit we could loan them but are concerned in case they split up. We still have a 60% ltv mortgage ourselves.
Which of these 2 opitions would be most sensible;
1 My wife and I get a BTL mortgage and they rent the property off us.
2 We loan our son the deposit and he buys the property in his name.
Any other advice or help would be greatly apprechaited.
Many thanks in advance
Our son and his girlfriend are looking to purchase or rent a property. We are trying to find the best way to help them. He works and she doesn`t at present. We have approx 20k deposit we could loan them but are concerned in case they split up. We still have a 60% ltv mortgage ourselves.
Which of these 2 opitions would be most sensible;
1 My wife and I get a BTL mortgage and they rent the property off us.
2 We loan our son the deposit and he buys the property in his name.
Any other advice or help would be greatly apprechaited.
Many thanks in advance
0
Comments
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I think you can set up a agreement with a soliciter that if they break up and have to sell the property that you get your 20k back kinda like the celebs do when they get married. Otherwise he could get the mortgage in his name only, but then his girlfriend mmight not be happy paying into something she will get no benefit from if they do ever split up, or you could ask them to set up a DD paying you back a amount each month until they have paid back the 20k.
I'm not sure about buying to let so won't advise.0 -
The problem with going down the BTL route is you then expose yourself to capital gains tax of up to 28% of the gain when the property is sold.0
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What if I got a BTL and sold the property to my son in a few years at cost price. I wouldn`t want the profit as he would be the one who has paid the mortgage each moth even though I would own it.
Thanks for your help.0 -
Theoretically, your disposal of said asset would be deemed to occur at open market value and you would be assessed for CGT on this value. Of course, that does rely on either you being completely honest and/or the tax man noticing this is what you've done. BTL could have income tax consequences for you as well. Personally I think lending the deposit is a much more straightforward option.0
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How old is son? How long have he and GF been together? Are they likely to stay in the same area?...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0
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He is 24 she is 20. Have been together a couple of years and are staying in the same area.0
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How to help your son?
Ensure he can look after himself financially and emotionally.
Do you ever need this 20k back? If so then do not lend it him.0 -
What my parents did when I was buying my first house was say they would lend me half the required deposit for the sort of house I was looking for then it was up to me to save the other half. That way they could help me out while making sure I could be sensible with money.0
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They are both pretty young, and it's not a long-term relationship, yet, really. Have they lived together before?
They migth well be better off renting and seeing how it goes....much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
Let them rent and see how it unfolds.0
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