Using my cash to help children buy a house

anywho

Hello there,

The usual story. My daughter and her partner are paying far more in rent than they would pay for a similar property on a mortgage, Money is tight as they have a new baby, and are getting a business off the ground, and I suspect their credit rating is not fantastic.

For the first time in my life, I have a reasonable amount of cash (from pension / inheritance) that I will need in the future (to help the other kids or prop up my pension) - but I am working again, so I don't need at the moment and interest rates are rubbish.

I was wondering the best way to help my daughter, without risking the cash, or tying it up for too many years. I am thinking about a joint house purchase with them 50:50 (say) - so they would only have to get a mortgage for half initially. Can anyone see an issue with this - apart from Capital Gains, and the need for an agreement on what happens if they split up?

Now the tricky bit, I think. Ideally they would like to start paying me back every month (starting small), but over time they would gradually increase this and somehow take ownership of the whole house. Does this sound possible? Or can someone suggest a sensible, low risk alternative where I can get some of my cash back in a reasonable period?

I could of course gift them some cash in the first place - but it would have to be a much smaller amount as I will need to conserve cash for myself (and for the other kids) for the future.

thanks in advance!

A

ACG

They would not get a mortgage for 50% of a property where someone else owns the other 50%.

There may be ways to do it but you would be best sitting down with a broker to discuss the options and what you are happy to do in more detail, one option may be a mortgage in all 3names but then you are liable for the mortgage also.

Kynthia

Their mortgage would need to include all owners including you. If they need to repay you then this is this a debt that will affect their affordability for getting a mortgage? Would they even get a mortgage with possible poor credit and newly self-employed? What if they couldn't afford to start buying your half off of you would you force a sale eventually and kick out your family? What if they defaulted on their mortgage, as a joint mortgage it would ruin your credit history and the bank would chase you for payment so what would you do then? Lots of things to consider, research and plan for befire going ahead.

amnblog

Much depends on their ability to lend. You suggest they have a new business and probably a poor credit rating.


You can put up some cash that can be back under your control in three years with some schemes. They do need to be credit worthy though.

cashforhousescolorado

The mortgage security will be applicable on 100% of the property. I suggest you to take a proper advice before proceeding with anything like this.