Investing in Me

Jegersmart

Just to reiterate: don't do it.

imho

J

Vikki_74

Not sure how the figures would stack up for you, but Lloyds TSB have a Lend a Hand mortgage which allows kind of what you are proposing - you put up 5% deposit and a 'helper' puts in savings worth 20% of the property value.

Details here:

http://www.lloydstsb.com/mortgages/lend_a_hand.asp

jamesd

You might consider agreeing to pay RPI+1%, £1 repayment initially, repayments to be 50% of any increases in base salary minus any increases in mortgage interest payments until the loan is cleared. That has zero cost at the time of mortgage application and no effect on mortgage affordability if interest rates change.

calypso_rhapsody

MyLastFiver wrote: »

The alarm bell for me is that your aunt views this as an "investment" rather than as a helping hand.

I quite agree - i have PM'd the OP about my own experience as a lender to someone in his position but i think this quote summarises the situation nicely. If his aunt is to help him out in this way then she has to understand the risks attached to it (as I do in my case) and she has to have a high level of trust in him.

The question i posed to the OP was if in five year's time you are in negative equity and completely unable to pay your aunt will she be able to cope/understand? and how will he feel if he jeopardises her financial position in this way?

I am lucky enough to make this helping hand loan and afford to take the hit if it should come to that - but as the lad is a trainee solicitor i am hopeful that he'll be in a position to repay soonish

jimjames

Using the figures mentioned previously, assuming mortgage and loan repayment is £1000 per month. Also assume utilities and other bills are £250 per month (council tax, gas electric etc)

Thats a total of £1250 per month you would be paying out for the new property. If this is money you can afford and you are not paying rent at the moment then you should be able to save this amount per month. If you can't save it now then chances are you wouldnt be able to afford the property.

£1250 x 12 months = £15000 and you have £20000 deposit when you're existing savings of £5k are added.

To me that seems a much sounder footing to buy with and it will only take 12 months in which time prices are very unlikely to have moved significantly.