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Shared ownership
madbazoo
Posts: 52 Forumite
We currently live in a large detached house and are in our 60's with two children who have left home and have their own properties. At some time in the future they will jointly inherit our house which would clear their mortgages.
One of them currently needs to move to a larger house but may have issues with affordability and mortgages.
If we downsize could we invest the balance of the proceeds in some form of shared equity with them? Hopefully it would give them a chance to repurchase from us at some time if they can afford it or get full possession when we die. Would need to be structured properly in a will to ensure both children are treated equally.
Would mortgage lenders allow them a mortgage on their share and what are the tax implications for us.
One of them currently needs to move to a larger house but may have issues with affordability and mortgages.
If we downsize could we invest the balance of the proceeds in some form of shared equity with them? Hopefully it would give them a chance to repurchase from us at some time if they can afford it or get full possession when we die. Would need to be structured properly in a will to ensure both children are treated equally.
Would mortgage lenders allow them a mortgage on their share and what are the tax implications for us.
0
Comments
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Sell your house and give them the money now if that's what you want to do.
Avoid getting debt to help them out.
Whilst it's very kind it's not always the answer and could leave you in the kack.0 -
I think the OP meant for them to sell their house and then effectively purchase a stake (equity share) in this new house of their child's. No debt is being taken by the OP.
OP - is it important for you to retain ownership of part of this house? If not, why are proposing to do this rather than simply gift the cash to your child now and then handle the split of your eventual estate through your wills?0 -
If you decide to go into some form of co-ownership with your child on a shared mortgage you will be jointly liable for all of their mortgage-payments should something catastrophic happen later, like illness or joblessness. This may not be the sort of commitment you need when you're on the cusp of retirement.
Downsize and make then a gift and then adjust the share of your joint-estate in your wills to reflect that gift.0 -
Mortgage lenders are not interested in literal shares in property. If the title is held by say 4 people all 4 will be responsible for the mortgage - they cannot get a mortgage just on their "share".
If they don't keep up the payments you will be liable.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0
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