Selling a percentage of our home to our son

Idiophreak

I agree on a couple of points with the above:

1) As you say, he wants to invest so that he can afford a home when he's through with the army - in order to get a home he'll have to get the equity from your place...what will you do then? Sell up? Remortgage?
Needs thinking about.

2) If he's not going to be living there, but you are, you need to start paying him rent comparable to that he'd take renting out a 100k flat somewhere, otherwise it isn't fair on him...this means you'll get a lump-sum in and clear the debt, etc, but will then have to pay him several hundred pounds a month rent - is that OK with you?

3) I'd have thought as he's not resident, he'd be after the best return for his money - this, clearly, would mean buying in an up-and-coming area. By the sounds of the OP (correct me if I'm wrong), your area is already quite inflated in price...So why would he invest in your house (and not get anything from it) rather than invest somewhere different, stand to make more money in price growth and possibly get a good rental income too...

Just doesn't add up to me...

Diver

lynzpower wrote: »

What bothers me about this plan is that "would any lender lend to him on these terms"

if he defaulted ( and stranger things have happened) then how could the lender take posession?

It would be a joint and several mortgage with % owned as a side agreement. The lender’s recourse in case of default would be the same as any other.

lynzpower

has he asked a whole of market broker how likely this is?

Diver

nobblyned wrote: »

I still don't quite understand from your point of view. You don't want to leave your house, yet if you sell a proportion to your son, isn't that exactly what will happen an a few year's time?

Or by that time will you be happy to leave? Is there another way out of your debt problem that wouldn't force you down this irreversible path?

Sorry about the typeface. Hope this is better.

I see this as a medium term solution as we plan to move in 4 to 6 years anyway

Diver

Badger_Lady wrote: »

I realise you've said that "for various reasons he's not interested in buy to let" - what are his reasons? Sorry, I just can't think what they could be!

As I understand it a number of his colleagues have experienced problems with buy to let and peer pressure has (rightly or wrongly) caused him to exclude it from his plans

Diver

BettiePage wrote: »

I'm married to someone in the RAF, but thanks for your views anyway.

Sorry! I didn't intend to be patronising.

Catblue

Your son is only 20 and still very young. A lot of people get very disillusioned after a couple of years of military life, so I would not be banking on him remaining in the same position for too long.

The most likely thing to happen in the next few years is that he meets someone and wishes to set up a home with her, even if he still intends to continue in the army.

A lot of women aren't keen to leave their own country and set up home in married quarters in an army camp in a foreign country.

Your son will then be in the position of deciding whether to:

a) Force his parents to sell their house
b) Abandon any notion of setting up a home for himself, his partner and potentially his own family

Not a nice position to be in.

Diver

Coupon-mad wrote: »

Sorry it's not related to your last question as I don't know the answer to that, but what about your other 3 children's inheritance?

The possible falling-out could come from one of them if they feel that your son would get a bigger share of the family home they they will when you eventually pass on. Don't underestimate how they all might feel about this later on, I see they must be teenagers now but the repercussions later will be huge.

Presumably you would put in both your wills how the % that you own would be distributed upon both of your deaths (would your son get a part of that % or not?).

Sorry to ask but what if the worst happened in say, 2 years time, how would the other siblings get their inheritance if he was not able to buy them out and didn't want to sell either?

You may have thought all this through but your other children need to know what is being discussed so they can all raise any worries now, rather than fall out about it later. No-one wants to think about inheritances but TBH if the other members of the family feel any arrangement is unfair they won't be able to stop thinking about it....that's when bad feelings and fallings-out happen, I have seen it in my own extended family.

You are absolutely correct and once I have done my homework my wife and I would discuss it with his sibs before making a final commitment. The inheritance thing is relatively easy to sort out with our will. My brother and I did something similar for my father (albeit in the last two years of his life) and this was with the full agreement of our two sisters.

When the arrangements are open and transparent it is far less likely to cause problems further down the line.

Diver

dolce_vita wrote: »

On a similar thread last week, I described a poster as

"a loser who had p1ssed all their money away in a debt addicted frenzy and was now looking for an easy way out"

I got severely flamed by others for being too harsh and not understanding the situation fully.

So I'm not going to say it again in case I get in trouble.

Your comment is inaccurate, unhelpful and out of sync with the etiquette of this forum

Diver

lynzpower wrote: »

has he asked a whole of market broker how likely this is?

We are doing that as well