I need money!!

Bob-cat

We came into some money a few years back and split it between our children to help them buy a house. My daughter was at university at the time so could not get a mortgage for the balance of the cottage she bought so we took out a mortgage on our house and lent her the rest with the understanding that, once she left university and got a job (at last!!!) she would then get a mortgage and pay us back.

The problem now is that she cannot tick the right boxes with the mortgage companies. She is not a first time buyer as she already owns the house (it's in her name), it's not a remortgage as she does not have a mortgage and an equity release seems to be only for the over 55s.

In 18 months time we have to pay back the mortgage of £66,000, which is roughly 55% of the value of her cottage. She is earning about £23,000 a year.

Any suggestions?

GMS

It is a remortgage. Who told you it wasn't?

Speak to a broker who can help you through the process

Thrugelmir

Why 18 months time? How long did you take the mortgage out over?

One solution is for you to remortgage and your daughter pays you the money to meet the monthly repayments and repay the mortgage.

Bob-cat

GMS – her broker told her it wasn’t a remortgage as we took out the mortgage on our house and gave her the money - so she bought the house with cash. So, technically, it’s not a remortgage as she needs to have a mortgage in the first place to be able to remortgage, if you see what I mean.

THRUGLEMIR – we have to pay the mortgage back next year as we took out a 5 year, interest only loan and, as we’re both in our mid-60s we don’t think we’d be able to get another mortgage.

GMS

It is a remortgage as it cannot be a purchase as she can not buy the property she already owns!!

It is a remortgage of an unencumbered property.

Try another broker

Thrugelmir

Bob-cat wrote: »

THRUGLEMIR – we have to pay the mortgage back next year as we took out a 5 year, interest only loan and, as we’re both in our mid-60s we don’t think we’d be able to get another mortgage.

Speak to your lender and explain the situation. As providing your mortgage is discharged the lender still has the same exposure. Having full visibility on the transaction may be of benefit.

I would still recommend that your daughter pays you now in order that the balance starts to reduce and she adapts to making the regular committment.

Bob-cat

Thank you both for useful advice. Daughter has been paying us our installments so we weren't out of pocket so she's well used to the money coming out of her account every month!

Thanks again.
:beer:

herbiesjp

It is a remortgage.

Plenty deals will offer free legal fees and valuation

Your current broker is wrong - definitely get a second opinion.

Thrugelmir

herbiesjp wrote: »

It is a remortgage.

Its an equity withdrawl. As there is no existing mortgage on the property the daughter owns. Providing there is a clear undertaking in the way that the release of funds is used then should be no problem.

herbiesjp

Thrugelmir wrote: »

Its an equity withdrawl. As there is no existing mortgage on the property the daughter owns. Providing there is a clear undertaking in the way that the release of funds is used then should be no problem.

Most lenders will call it a remortgage of an unencumbered property;)