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Relocating Parents - buying a house for them?
Comments
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Thanks xylophone, that makes it sound a lot easier.
I might speak to nationwide again then to see why they will not allow me to have the money and expect it back? When I questioned them on it they said it wouldn't meet their lending criteria as they would be financially dependent on me. it is no great issue to move lender though.0 -
lionelflare1 wrote: »I have spoken to Nationwide who I currently have my mortgage with and they have told me I can remortgage to take out equity from my property and can gift the money to my parents, however I can only do this if I am not expecting to get the money back as this would make them financially dependent on me?
It doesn't need to be done that way. With Santander and a few other lenders (and I've done this with Santander) you make it a loan which is only repaid when the property is sold. That way there is no financial dependency in terms of needing to make repayments. The loan agreement is drawn up by a solicitor properly.
You agree you wont live in the property and you dont own it either (so no SDLT issues). And you agree what money you will get back when the loan ends. That might be the initial sum, the initial sum plus X% interest a year, the initial sum pro rated according to what the house is sold for pro rated according to what the house is sold for compared to what it was bought for. (eg if house rose 60% and you have put 2/3 in (your £100k to their £50k) you'd get 40% increase on what you loaned, so £140k back (from estate most likely) Whatever you think is fair anyway.0 -
The value could fall, though.0
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AnotherJoe wrote: »That's a risk the OP might be happy to take, but they could always say its the minimum of original sum loaned and pro-rated increase. It's up to them amd the parents.
To be fair it is a risk that we are happy to take. Its the same risk that anyone has when buying a house, there is no way of knowing its future value.0
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