best way to finance sons mortgage deposit

noel41

hi
i have £14500 left on my mortgage
17 years 6 months to go.
my home is conservatively valued at £110000.
I want to help my son raise approx £15000 to use as a deposit on his fIrst mortgage, he is looking £80000 to £100000 price range.
he and his partner have a combined income of £25000 per year.
can someone please advise as to the best way to raise the deposit?,
I have only £3000 in savings, which i prefare to keep for emergencies,
and my son will be looking to pay me back.
i am in full time work and so long as i am not out of pocket (within reason) dont mind how we raise the funds.

thanks in advance for your advice

noel41

GMS

You could look to remortgage your home and raise the funds that way.

Keep in mind this would mean your mortgage increasing but if you are desperate to raise the money this may be the best option.

Could be an issue with lenders though if the money for a deposit is a loan rather than a gift as they would not be happy that your son has borrowed a deposit

pinkarsenalprincess

I'm assuming your son and his partner are working really really hard at saving most of the deposit themselves?

Incyder

Also consider that your son and his partner may well split up in a few years time, your cash input needs a solicitor to draw up a contract so its listed as yours and so doesnt benefit the partner by 50% of its value should they split.

diable

Don't do it I would say.

getmore4less

You don't have the money to provide a gift, this means you would have to borrow the money to make a gift.


But you say it will be a loan.

loans for deposits don't tend to be liked by lenders.

nearlyrich

The lender may ask for a letter stating that the deposit is a gift and that you will have no interst in the property. They don't care where the deposit comes from they just want to ensure that if they had to repossess no one will claim an interest in the place.

Incyder

All in all Noel, best forget it.
You have 3k in savings but u need to keep that, a new combi boiler or decent used car will swallow that up.
Let son and partner sort their own lives out.
It's too messy otherwise with all the various scenarios. Plus she may dump him in a year and cause chaos.
I think 2 things are bound to happen, interest rates will go up soon and house prices will drop furthur.
Keep your head down on this one.

dimbo61

Your son and his girlfriend need to get the mortgage on there own and if you can help with some of your savings which you can afford to give as a GIFT ( upto £3K a year by the way!).
If you had the money you could ask your son and his girlfriend to take out an offset mortgage with Yorkshire buidling society and then you could put money into an offset account linked to there mortgage ( but in your name with no access by anybody else)
Its called friends and family!!

northerner999

When I bought my flat I borrowed around £10K from my parents, pretty much wiping out their ISA savings. I have paid it back at the rate of interest they would have got from their ISA. Without this money I would have struggled to complete the purchase as I'd almost certainly have had to go to a commercial lender.

Although some on here are urging caution, it really depends on how well you trust your son and daughter in law. I bought on my own which reduced some of the risk for my parents, but they knew I'd never screw them over and likewise. If you don't have any legal agreement then you have no legal claim to the money back should your relationship turn sour.

I remember telling my lender that my parents were helping with money and they had no issue with that (this was late 2006). I don't recall being asked if it was to be repaid or if it was a gift - but I'm sure things are tighter now and technically keeping back such information is fraud. I appreciate this is different because the OP is talking about borrowing extra money, but thought I'd add my perspective.

noel41

oh my God!!
how many people on here dont trust their own kids?
i do, and i love them as well, which is what the original question was about.
we all know that there are greedy family member stories out there, which are true.
but if you cant look at your kids, who you have raised, and watched how they have grown and seen the morals and principles they live by, and be sure that they would rather go broke than let you down then i am afraid i can only feel sorry for you.
how about we stop trusting the banks eh???
and i was looking for advice as to the best way to help them get the deposit, this will greatly reduce their repayments, and so they could use the reduced payments saved to pay me back starting straight away.
without a deposit they are really struggling to get an offer, any offer, never mind one that screws them into the ground.
all i am trying to do is what any parent would (i hope) in the present economic situation, after the banks have shafted this country, i realise that they are now screwing over most first time buyers, requiring large deposits, and charging stupid interest rates.
my son never asked for anything, i asked him how his bank interviews were going, he gave me simple and clear answers to the reasons why he was having problems getting a mortgage, thats it no hinting, no begging, enquiries as to could i afford to help.
but as his father i thought to myself, maybe i could help.
i have roughly 70000 to 80000 equity in my home, could I in some way use that fact to help him?
to those who gave some advice, Thank you,
to those who see only money grabbing family members, or maybe losing some money while trying to help your children as some terrible catastrophe.
then i am afraid i have only pity for you.

noel41