Urgent advice required

Trajal

Before I comment on this, can I just point out this post which perhaps some of the previous responders would do well to take note of.

http://forums.moneysavingexpert.com/announcement.php?f=76

Right, that is out of the way.

To answer the OP: With a mortgage outstanding on the property there is no way that the property could be signed across to you (even the section of the equity which is 100% owned by your parents) as the mortgage conditions will require the property ownership to be vested in the mortgagees who made the original arrangement.

As has been pointed out before, if your parents do wish to help you then they can do so by way of an equity release or second mortgage and use the monies from that to repay your debts for you. You then will owe them the outstanding of course.

Also, that is a very significant amount of cash so you should probably want to treat it as a loan and have a repayment schedule etc drawn up, otherwise there can be implications in respect of 'gifts' etc to individuals.

However, presumably that won't matter too much as any monies paid back to them by you will simply go against the second mortgage and again presumably you will benefit as you stand to inherit the property (a fair few presumablys in there but you see where I'm coming from).

In short - they can't easily sign the property over to you because of the outstanding mortgage but there are nmumerous ways in which they can help you by leveraging finance from the property and then gifting/loaning the resultant monies to pay off your debts, however there could be some potential tax implications attached to this so worth checking it out.

And finally, welcome. Sorry you had a bit of a baptism of fire, people are very protective of parents and houses! But don't let that put you off, stick around, sounds like you can use some of the thrifty advice that people spread here - it's great stuff and really makes a difference to how you feel about yourself!

charlotte4940

Can your parents re-mortgage for the cash you need to borrow and give it to you as a 'loan' and you cover the extra monthly payments on the house?

Danni-R

Trajal,

I understand why you linked it but I also think the OP is missing the point.

It doesnt make sense to turn unsecured debt into secured debt (aside from the fact its not even his house)

After requests to see an SOA he's not.

He's had it explained that he doesnt need to own his parents house.


OP.

Cant you move in with your parents to reduce costs?
Can you post an SOA so we could see where you could try and manage the debts on your own?

If you have no house and 50k of debt have you called the free charities to see what they advise?
Is going bankrupt an option (even last resort)

There is a wealth of knowledge here and people willing to help. Dont assume that everyone is a troll just because you dont agree with their views/ dont like the advice.

lynz68

My concern would be that by your parents bailing you out of the situation you have got yourself into that you will learn nothing from the experience and simply build the debt up all over again. You are an adult stand on your own two feet and deal with your debt.

Trajal

raycharles999 wrote: »

Well that was sort of the idea, re-mortgage a proportion of it with a view to me then paying the mortgage off with them, in essence me part owning....?

In essence you wouldn't part own the property.

Current situation

You: £50,000 unsecured debt to various CC companies etc.

Them: £90,000 secured debt, £120k equity


Your proposed situation

You: £50,000 unsecured debt to your parents

Them: £140,000 secured debt, £70,000 equity, £50,000 loan note from you which they use to repay the extra secured debt.

People need to calm down, if your parents have suggested they may be able to help you with this then that is their choice. Your part in this, OP, is to make sure that if they do this huge favour to you, you don't then go and mess up again.

Thus you need to tackle this wholistically. I don't mean spiritually, I mean "As a whole". If they are able to release some equity value of their property to extend the loan to you then you need to pay it back to them as you propose, so you will still owe £50,000 but it'll be lower interest (if at all, that's up to them).

What this means is that you need to learn to spend less money than you earn - not easy in itself, and you will need to learn to go without luxuries and economise.

I suggest posting an SoA to see if this is a viable option because if you can't meet those additional mortgage repayments to your parents then it's a non-starter.

People being outraged or angry etc, please click on this text for a brief message which will hopefully change the way you approach your response.

kloana

Trajal wrote: »

People being outraged or angry etc, please click on this text for a brief message which will hopefully change the way you approach your response.[/URL]

To be fair, it's a big deal to make this kind of agreement with your parents, against such a valuable asset no less. None of us know the true picture, but "can I somehow wrap up 50k into my parents' house?" is a bit different than the standard "how can my dad get me a 5k loan to clear my CCs"?

Threads that the OP might also want to read include:

https://forums.moneysavingexpert.com/discussion/76953

https://forums.moneysavingexpert.com/discussion/3709

Not sure if there's one advising the pitfalls of consolidation in general, but surely the general MSE mantra is if in debt, new borrowing can hurt, in that it can add to the problem. New borrowing in someone else's name can hurt someone else.

Trajal

kloana wrote: »

To be fair, it's a big deal to make this kind of agreement with your parents, against such a valuable asset no less. None of us know the true picture, but "can I somehow wrap up 50k into my parents' house?" is a bit different than the standard "how can my dad get me a 5k loan to clear my CCs"?

Threads that the OP might also want to read include:

https://forums.moneysavingexpert.com/discussion/76953

https://forums.moneysavingexpert.com/discussion/3709

Not sure if there's one advising the pitfalls of consolidation in general, but surely the general MSE mantra is if in debt, new borrowing can hurt, in that it can add to the problem. New borrowing in someone else's name can hurt someone else.

Those are good links, thanks.

I also take your point about the scale of it. Don't get me wrong please, I personally think it's a bad idea, but someone comes looking for help we should be gently steering them in the right direction (hence the SoA requests) and informing them as to the practicalities of the situation rather than biting their heads off.

Many of the responses came across very badly, aggressive even. There were, to me, rather disappointing and not at all what I have come to expect from this particular board.

DizzyMum_2

Hello,

If your parents were able to release equity - and there's no guarantee that they can - then you'd also need to factor in interest as they'll be paying interest on any extra they borrow.

DM

dktreesea

OP, do your parents have sufficent income to be able to increase their mortgage from £90k to £140k? Increasing a mortgage isn't always as easy as it first appears.

You might want to take a look at inheritance tax rules:
http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm
before going down the track of them signing the house over to you. Not to say anything bad would happen in the next few years, but there are implications for parents giving gifts that exceed the annual exempt amount if their estate is likely to be worth over a certain amount.

While usually I wouldn't recommend turning unsecured debt into secured debt, if the difference was, say over 15% per annum in interest, then financially it could make sense.

[Deleted User]

I would say never attach debts to a property; the obvious risk is you might lose the home.