home improvement loan for a non homeowner?

Lauren.92

It's a bit of a complicated one, the banks won't give me any advice so wondering if anyone can help me?
Me and my partner are 22 and have recently moved back in with parents (to save for a Morgage deposit) after private renting and staying with family for
The past5years. My partners grand parents have been council tenants for 40years and therefor have a 77%discount on their 3bed home. Which means THEY can buy it for around £30,000. Being pensioners they cannot afford it nor can they get a Morgage. As we have not lived there, we do not
Have the 'right to buy' .We are thinking about getting a personal loan this summer to outright by the house. However it will have to be the grandparents that hand over the money over which will make them the home owners. Soon after they'd write a will and after 5years they can sell the house to us for a pound. We then need another large loan to build a granny flat type extension for the grandparents to move into. However as we won't technically be the homeowners. Would there be a loan available to us?within such short time of having the initial loan to buy the house?

MisterB1959

sorry to burst your bubble, but you really need to read some related threads to realise this is a disaster waiting to happen !!

Lauren.92

Please do enlighten me!

stator

Getting a £30,000 unsecured loan will be impossible.
Your grand parents wouldn't be able to receive any state benefits or care home funding etc as they would be seen as having deprived themselves of hundreds of thousands of pounds deliberately.
Inheritence tax might come into it too if they die within 7 years.

sammyjammy

Why not leave the grandparents to live out their lives in the house they have securely lived in for forty years and make your own way in life.

Lauren.92

We've already spoken to a bank and getting the first loan won't be the problem. And excuse me, maybe I didn't portray this correctly. It is not us that wanted to initially buy the house. They want us to!they have paid rent for 40years and wouldn't want this to go to waste.Sammy jammy, Our plan was to save and do it ourselves .I am not asking for bias negative opinions , I'm asking for advice to see if it is even possible.

Annisele

I'm confused about the order you want to do things in, and particularly whether the extension comes before or after the "wait five years" part.

I think you want to borrow £30k, give that to your grandparents, (almost) immediately start building the extension, wait five years, then buy the house for £1. If that's the case, it's a non-starter unless you can get personal loans for £30k plus however much you need to build the extension.

I'd be surprised if you could get personal loans for £30k for the purpose you're talking about,and even more surprised if you could get an unsecured loan for the total amount you'd need to build the extension. If you can, I think your plan is possible (subject to planning etc) - but that doesn't necessarily make it a good idea!

I think there are both family reasons and financial reasons why it's a bad plan.

While you were staying with relatives, did you spend any time with your partner's grandparents? If not , I'd suggest you do. And are there any other grandchildren who might be annoyed by the plan? And what happens if the grandparents need care - would you be expected to provide it? What if you and your partner split up - you'd still be liable for the loan, but the grandparents could change their will to cut you out entirely.

Financially, you'd be giving tens of thousands of pounds away with no guarantee you'd ever get it back. There are *many* ways that could go wrong! And there will probably be tax and benefit implications for both you and the GPs.

Lauren.92

Yes you've got the order right. Having spoken with the bank they have pretty much said you can get the personal loan of upto 25K.We'd have to say it's for something else. (a car or something) proof not needed. We'd have 5K saved ourself in a few months. But it's the second loan I think that may not be possible?
In terms of living with the grandparents, we have lived with them before for 9months and had no issues.all other family members are encouraging us to grab this deal if possible as we are the only ones that can. Yes ofcorse if we split up then I am liable to pay the loan back. Which I suppose there's no way around.

Thanks for the advice though. It's all very knew to me so looking for as much advice as poss!

AdrianC

Lauren.92 wrote: »

We've already spoken to a bank and getting the first loan won't be the problem. And excuse me, maybe I didn't portray this correctly. It is not us that wanted to initially buy the house. They want us to!

It doesn't matter whose idea it was. It's still not a great one, and both you and they need to understand the full implications.

they have paid rent for 40years and wouldn't want this to go to waste.

It hasn't gone to waste. They've had a roof over their heads for the last forty years. That's what they've paid rent for, and they've got it.

I am not asking for bias negative opinions , I'm asking for advice to see if it is even possible.

Yes, it's possible, if you can get the loan. But you NEED to be aware of the implications. This is not negativity, it is realism.

MobileSaver

Lauren.92 wrote: »

personal loan of upto 25K.We'd have to say it's for something else.

all other family members are encouraging us to grab this deal if possible as we are the only ones that can.

So you, your parents and your grandparents are all happy for you to commit deliberate fraud? You do realise this a crime that carries a penalty of up to 10 years in prison if you are caught? All it takes is for a disgruntled neighbour, co-worker or family member to click a few buttons on the Action Fraud web site and the next knock on the door could be the Police...

Who is going pay for all the ongoing maintenance for the house over the next five years?

Five years is a long time, your grandparents could change their will to leave it to the cat's home or that nice young man from the local Church five years from now.

If the house does get transferred to you in five years time, what happens if you and your partner split up and the property has to be sold because he wants his 50% of the equity? Answer: Your grandparents lose the home they've lived in for 40+ years.

This is always going to be a terrible idea for your grandparents and could also be disastrous for you if you get caught.

Annisele

Lauren.92 wrote: »

Having spoken with the bank they have pretty much said you can get the personal loan of upto 25K.We'd have to say it's for something else. (a car or something) proof not needed.

As others have said, you can't (legally) do that. What you're really saying is that you know the bank won't lend to you if you tell the truth, so you'd tell them "something else" - in other words, you'd lie.

I know it sounds harsh to call it fraud, but that's exactly what it is. I'd rather tell it as I see it, because I think it's much better for you if a bunch of random people on the internet call you a wannabee fraudster now, rather than have the bank/the police/national hunter database say so in a few months or years! If you do end up with a fraud conviction that'd kill any hopes of ever getting a mortgage; it's *much* worse for your credit than bankruptcy.

But it's the second loan I think that may not be possible?

As above, I think you have a pretty big problem with the first loan - I don't see how you can get it legally. You only really need one loan, it just needs to be much bigger than you appear to be able to borrow. (You don't say your income, but £30k plus extension costs is one hell of a personal loan. If you can get that, you're earning so much that you ought to be able to save the £30k in a few months).

The only way I can see you doing this is if you save save save until you have the money in cash. I still think it's an astonishingly bad idea, but that would at least make it possible.