Can my nan release £50,000 equity from her £250000 house to for a deposit on my flat?

danstephens

Can my nan release £50,000 equity from their fully paid £250,000 house to put down a deposit for my flat?

Basically we want to put down a £50,000 deposit down on a £100,000 flat in my name...

Is it possible that my nan releases £50,000 equity on her £250,000 house that is paid for to put down a deposit in my name on a flat worth £100,000? my credit is ok & I earn £20,000 a year...

How does it work?


My understanding is that it's possible, and once my nan & grandad die, & my mum inherits the house & she sells it she would get £200,000...

I have heard the downside of it is the interest on the equity they have taken out but I don't understand how this works... what's the interest & how is it calculated if say my nan & grandad die in 5 years time?

Please can somebody help give me an understanding of how this works with the pro's & cons included?

Thanks

ILW

You do sound a bit of a ghoul, planning what to do with the inheritance already.
Ever thought of trying to stand on your own two feet?

dane-katie

If the OP nanan has offered to do this whats wrong with the OP getting a head start?

I cant give any help sorry as i have never bought a property etc

Good luck and hope you find your answers

CloudCuckooLand

Didn't get any answers, let alone the one he wanted last time... https://forums.moneysavingexpert.com/discussion/3104502

"we" put down a £50k deposit. You mean "she" - its not your deposit.

Does she have an income to raise a £50k mortgage? What happens if something happens to that income...why should she risk her own house?

Equity release should be a last resort for financial difficulties or the elderly who are happy not to leave anything behind, not treating relatives to £50k gifts. Too much interest rolls up - your Mum would never see £100k, let alone £200k.

And Nan will have either CGT or IHT issues, depending on how its bought/owned. And potentially deprivation of assets, council care and pension credit issues.

Your credit is terrible, you have a recent DRO...lying doesn't encourage positive responses.

Do you really think it is a good idea to get back into debt so soon after needing a DRO ?

If Nan wants to do this, she needs to understand it all herself. Get her an MSE account, and we can give her advice. If she is not into IT, tell her to talk to a solicitor.

Fee fi fo fum, I smell the blood of a ghoulish troll.

steveM1978

Hi,

Many parents and grand parents like to see the inheritance being spent and how it is spent, this usually refers to money that is in saving accounts doing nothing. when it comes to gran releasing equity it isnt really advisable.

does nan have a good pension? some lenders will lend money to people and take in to account pension income. Nan could release 50k from her house and buy the flat, rent it to you and charge you the going rate, this will pay back her 50k mortgage (which many lenders will tak as income regardless of age). she retains the interest in the property and you get your flat.

CloudCuckooLand

steveM1978 wrote: »

this will pay back her 50k mortgage (which many lenders will tak as income regardless of age). she retains the interest in the property and you get your flat.

Until debtor repeats past history, rent isn't paid, mortgage isn't paid, and Nan loses house...?

steveM1978

That is between landlord and tenant. I speak to people on a daily basis who have made mistakes in the past, most are embarrassed about how foolish they where and I personally think that these adverts encouraging people in to IVA’s are criminal, people see it as an easy out when they should be concentrating on repaying debts.

BillTrac

steveM1978 wrote: »

That is between landlord and tenant. I speak to people on a daily basis who have made mistakes in the past, most are embarrassed about how foolish they where and I personally think that these adverts encouraging people in to IVA’s are criminal, people see it as an easy out when they should be concentrating on repaying debts.

I'll have a pint of whatever you are on....:rotfl:

BillTrac

yet another thread about some scrote spending their 'inheritance' before their relative has left us.

Why is it that lately everyone who sniffs the slightest scent of any money left after their gran/grandad/uncle/aunt comes on here for advice on how to spend it?

If they had any decency they would be encouraging their relatives to spend it on themselves to make the most of their lives, or what's left. But no, grab, grab, grab.....:mad:

steveM1978

BillTrac wrote: »

yet another thread about some scrote spending their 'inheritance' before their relative has left us.

Why is it that lately everyone who sniffs the slightest scent of any money left after their gran/grandad/uncle/aunt comes on here for advice on how to spend it?

If they had any decency they would be encouraging their relatives to spend it on themselves to make the most of their lives, or what's left. But no, grab, grab, grab.....:mad:

You have a very good point bill many people are like this. Let me just spin it another way for you though a friend has two kids and a long term partner (now wife). His gran had £10k in savings for him as inheritance. About 6 years ago she gave it to him and he bought his first house for his little family. His gran is still with us and can see where her money has gone and she is very happy to watch the kids playing in the garden (yard!) knowing that she contributed.

People have a strange way of wording things and can come across wrongly on a forum. This guy may just be very blunt and to the point. I have read other posts in the past that ask the same question but worded differently, no body flames them. He is looking for financial advice, not a lesson in manners. I am sure that a mortgage advisor / solicitor will be able to tell if his gran is sound of mind and aware of what she is getting in to.

danstephens

Thanks for your advice guys,

Look I got into debt in basically 1 month from recoverring from a very bad time when I was very vulnerable...

Before we go through any of this I have made the agreement with my grandparents that I have to have a 1.5yr history in a job paying at least 20k a year and I must also have 5k deposit built by myself...

I have a course coming up this month so I am better qualified to earn more money, and it's the offer of this deposit that has really whipped me into shape, without it my life would be a great struggle, career wise and getting a mortgage. But my nan & granddad see that it can really help me in a lot of ways.

All I want is advice on the finance & not anything to do with whether you think it's right morally, you don't know the ins & outs of the situation so please stay out of that... So please can I just have help with my question?