Using equity for a mortgage

NearOn

Good point violalass, thanks for answering my question, wont be going down that route.

BitterandTwisted- Correct me if Im wrong but you have no idea why we can not save up a deposit for a mortgage so do not presume. We pay rent every month along with other expenses that is more expensive than some of my friends mortgages so I know we can afford to pay a mortgage.

laurel7172

If you don't know the terms of the trust, you're not going to get an answer to this. Sorry, but it wouldn't even be worth asking a solicitor, never mind raising the question on an internet forum.

What *might* have happened is that your wife's grandmother's inheritance tax allowance was used to transfer her half of the family home into a trust on her death. Why this would be for the life of your mother in law, I don't know. Does she live there? Normally, it would be for the life of the grandfather.

Personally, I think you're making a mistake we often see on these forums-that of regarding as your own the assets of somebody who isn't actually dead yet.

But if you really want to go ahead with this, you need proper legal advice before you can even think about going any further.

NearOn

laurel7172 wrote: »

If you don't know the terms of the trust, you're not going to get an answer to this. Sorry, but it wouldn't even be worth asking a solicitor, never mind raising the question on an internet forum.

What *might* have happened is that your wife's grandmother's inheritance tax allowance was used to transfer her half of the family home into a trust on her death. Why this would be for the life of your mother in law, I don't know. Does she live there? Normally, it would be for the life of the grandfather.

Personally, I think you're making a mistake we often see on these forums-that of regarding as your own the assets of somebody who isn't actually dead yet.

But if you really want to go ahead with this, you need proper legal advice before you can even think about going any further.

I dont want to go ahead with anything, my wife and me just wanted some simple advice, not a lecture. We know 50% will be ours one day and unfortuantly this day wont be too far away. If we had a choice, we would rather keep her grandfather alive! We are simply exlporing what avenues are open to us. I really thought this type of forum would be different, but same old people making presumptions.

ViolaLass

NearOn wrote: »

We pay rent every month along with other expenses that is more expensive than some of my friends mortgages so I know we can afford to pay a mortgage.

Have you done some calculations based on what you'd like to buy and what you'd therefore need to/could borrow etc? What your friends are paying isn't entirely relevant.

martindow

I think there is another issue here. If your grandfather needed care, the proceeds from selling the house or a charge placed on it would fund this if savings were insufficient. Another reason a lender would not be keen to lend against its future value.

Blacksheep1979

Emmzi wrote: »

yes, yes it can. but the loss is smaller because the deposit was paid in cash so was never theoretical.

Unlike the 'theoretical' house in the first post? Irrelevant of how the deposit is come by if the house in question burns down or is devalued and the debt is called in the lender will have lost money. They really don't care if they lose £50k when someone has put down a £100k deposit or lose £50k when someone is using half of a £200k house as deposit - it's still a loss at the end of the day.

The reason it won't be allowed is due to not having full possession of the property that is wanted to be used by the OP.

ILW

martindow wrote: »

I think there is another issue here. If your grandfather needed care, the proceeds from selling the house or a charge placed on it would fund this if savings were insufficient. Another reason a lender would not be keen to lend against its future value.

Good point, it could be that there is no inheritance in the end if it has all been taken in care fees.

BitterAndTwisted

NearOn wrote: »

BitterandTwisted- Correct me if I'm wrong but you have no idea why we can not save up a deposit for a mortgage so do not presume. We pay rent every month along with other expenses that is more expensive than some of my friends mortgages so I know we can afford to pay a mortgage.

You're right, I do have no idea why you can't save for a deposit: all I know is that you claim that you cannot or have chosen not to. It has always meant making great sacrifices to become home-owners and there are few short-cuts if you're not prepared to make any.

Interest-rates might be low now and your chums' mortgage payments might be less than your rent is this afternoon but have you considered what the situation might be if interest-rates go into double-figures again like they did in the 80s?