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Bank of Mum and Dad
Comments
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What happens if the happy couple split up?No reliance should be placed on the above! Absolutely none, do you hear?0
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What happens if a charge for £200K is put on the house and, when sold, it realises less than that?0
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A recipe for disaster.0
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the same as any other situation where someone sells up when in negative equity and a mortgage must be repaid .What happens if a charge for £200K is put on the house and, when sold, it realises less than that?
the person holding the charge (mortgage company or parent) will not allow the sale to proceed unless the charge is settled (discharged) in full on completion. Therefore the son would have to find the extra money from elsewhere to repay the father - that's why people have to take out additional loans to fund the shortfall.
the person buying the house (ie in reality their solicitor) would most certainly not allow the sale to complete unless the charge was cleared, otherwise the liability for the charge would effectively move to the purchaser and that simply will never be allowed to happen for obvious reasons - remember the charge is on the property so it stays in place irrespective of who the occupant is until it is cleared, hence solictors are so careful over charges0 -
That's what I thought 00ec25 - it was a partly rhetorical question but I thought the OP should know the details of these implications.0
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