How to help our Sons

Saffys_Mum

Good afternoon All,

I wonder if anyone could give me advice please? We have two Sons, one in officer training in the RAF and one at university. The one in the RAF has always said that he wants to buy a property as soon as possible as he will be living in mess's during his current twelve-year contract (although he aims to sign on to 55 as soon as possible) but doesn't have much money for a deposit as yet. The younger Son is paying vast amounts of rent in Edinburgh for a really nasty flat. In order to help both Sons we would like to put £10K (a lot of our savings), along with their contributions, towards buying a two-bedroomed flat. The mortgage would be in the name of the older Son and lived in by younger son, along with another person who will pay rent. The rent paid by younger Son and flatmate would go to pay the mortgage and our money would be returned once the flat is sold at some time in the future. We trust our two sons implicitly, but just wonder how we should go forward now - any advice please?

amnblog

You have an option to help them purchase without putting your savings directly into the property.


You just need to leave your contribution as security on deposit for 3 years.


Your boys need to put in at least 5% and you can get them a specialised mortgage at 2.99%.

kingstreet

Is this of any help;-

https://www.gov.uk/forces-help-to-buy

?

lonestarfan

It's a fine idea when you first start out but sometimes it can throw up obstacles later on. You might already have thought of these things but if not then some considerations to explore before making a final decision:- what might be the plan if older son meets someone and they want their own house and mortgage but he's already on one. You may then have to sort that mortgage/flat out and convert to BTL or sell or transfer to younger son etc. May not be an issue if the older sons income is very large when he becomes an officer & can support two mortgages. Could also potentially impact on older son wanting to apply for credit card or loans but may find his borrowing is limited by having a mortgage loan outstanding but sometimes it helps as it shows creditworthiness, it just depends on the amount. There's possibly house insurance implications if the owner isn't living in the mortgaged property and its being tenanted. May also need consent to let from the mortgage provider. Don't underestimate the service charges on a flat. I had one around the time of the crash and the managing agency were just constantly asking for one fee or another on top of service charge and ground rent and garage fees and window cleaning fees. I had letters constantly about occupants leaving stuff in the bin store and cycle store and communal areas and was forever charged for them clearing it up. Im in a house now but if I had my time again I'd save for a small 1 bed or 2 bed House. Mind you some of the 2 bed flats had a bathroom and an ensuite so were particulalry good for renting to a lodger.

Yorkie1

Your eldest son would have to declare your money as a loan, because on what you've said it isn't an outright gift so for you and him to sign declarations that it is a gift would be fraud. This could impact on getting a mortgage.

rolandpull

What branch is your son training to be in the RAF? It might well have quite a lot of bearing on whether the house is a good idea or not.

Saffys_Mum

Hi, thank you for all your help, my Son will be an engineering officer, so don't know if that makes it worse or better to get a mortgage?

I know that there could be loads of hurdles to doing this, but we would really like to help both of our sons while we can. We won't need to use a managing company as we will manage the flat ourselves and, with the younger one living in the flat there shouldn't be too many problems with outsiders, but thanks for pointing out potential problems, many of which I hadn't thought of.

That is interesting with regard to the option of putting the security on deposit for 3 years, would this have to be in the form of cash or could we put shares on deposit do you know?

amnblog

It is a cash arrangement - on which you are paid interest.

stator

Help them to learn independence and keep your cheque book closed

FollyKnockers1

It's a lovely thought.


Barclays do a 'Springboard Mortgage'


Hope that helps