Any Suggestions?

Cacran

My son and his GF have seen a house they would like to buy. They have saved £10,000. We are in a position to lend them the money. They could offer cash for the property and have the benefit of getting it cheaper.
We get very little interest on our money in the bank and have no need to spend it.
We want to help them out. BUT what would happen if they get the house in joint names and then they split up (God forbid!)?
We do not want the house in our name. We are in our early 60's and have saved up all our lives. We know that, those that have money, seem to lose out. The money would go to the children in the long run, in any case. We understand that the seven year rule.
Our son's girlfriend wants to be named on the property as she wants to feel they are equal. I can understand that.
Neither of them have asked for financial help, but could possibly not afford a biggish mortgage as despite both working, full time, their wages are not great.
The house they want is just around the corner from us and we are delighted that they should contemplate living so near to us. We would both be there on hand to help each other, should the need arise.
I just want some advice, please.

Toptom1

You need to draw up a contract with your solicitor which says that if they split up etc that you get your money back and then the rest is split up between the couple. That is vital!!


Be prepared that the house can go down as well as up in value and don't expect to see your money again but your son would save a nice fortune.

Hoploz

Maybe if you discussed it with them the girlfriend would take the point about the ownership thing and not mind if under the circumstances it was just in your son's name, as you would presumably be cheaper than a mortgage to pay back so that would be of benefit to her

Hoploz

... After all if they later went on to marry if your son owns the house then she would own half anyway.

Cacran

Hoploz wrote: »

Maybe if you discussed it with them the girlfriend would take the point about the ownership thing and not mind if under the circumstances it was just in your son's name, as you would presumably be cheaper than a mortgage to pay back so that would be of benefit to her

That is what we would like ideally. But I can understand why his girlfriend feels as she does. I think we will talk it out with her parents, too. I would not like them to think we were taking over.

We are scared that we have saved all our lives for our children, and if something went wrong, the money would be lost.:)

Cacran

Toptom1 wrote: »

You need to draw up a contract with your solicitor which says that if they split up etc that you get your money back and then the rest is split up between the couple. That is vital!!


Be prepared that the house can go down as well as up in value and don't expect to see your money again but your son would save a nice fortune.

We need to make a water tight contract. We know that the money is no longer ours but we want the value we give him, to be his. Obviously we would have to take the risk of property prices dropping, that would then be his loss, but I think that loss should be shared by his girlfriend and likewise if the property went up.

I am not sure, if I am thinking straight with that opinion. Does that sound fair in your opinion? At the moment I would like to get some common sense opinions before we employ a solicitor.

Toptom1

Yes, I recently seen a forum where the couple split up and the parent who gave the money will loose out because the son gf was intitled to half as they never drew up a contract. If they both buying a property then I guess in future if they split up its shared 50/50 after your money has been taken out.


Could save a lot of headaches and worry in the long term. Solicitor would be the best person to speak to.

Cacran

My son's girlfriend has agreed to have the house put into my son's name only. She has agreed that, should they split up, they would get an up to date valuation she would get half of the profit, should there be any and stand half the loss, if that was the case.

Does that sound fair?

If she pays anything back, towards the original amount, she would be entitled that back too. We think that sounds more than fair, do you?

EverGreen_2

Cacran wrote: »

My son's girlfriend has agreed to have the house put into my son's name only. She has agreed that, should they split up, they would get an up to date valuation she would get half of the profit, should there be any and stand half the loss, if that was the case.

Does that sound fair?

If she pays anything back, towards the original amount, she would be entitled that back too. We think that sounds more than fair, do you?

The definition of "profits" is the key word. What profits?
In my own experience that is still unfair on your son. The "buying power of the currency (pound)" will not remain constant. You could buy a house "paying 200k" in 1999. The same house after being used and exhausted with only minimum maintain, is worth 800k or more right now. The profits should never be counted as 600k in that example.

rosie383

I think it sounds fair Carcran.

EverGreen_2

My post above has nothing to do with Girlfriend's/partner's rights. Of course she has got rights. Agreement on what "profits" is good to avoid future dispute. Also the power buying of the pound has to be fairly considered.