Cash house purchase parents loan

saajan_12

Your parents are essentially a mortgage provider who will actually accept you / an uninhabitable property. They can place a charge on the property (not sure if this is necessary though) After renovation, you effectively 'remortgage' the property with a lender, and in the same transaction your parents' charge is removed and the lender puts their charge on. The lender pays your solicitors the money, which can be passed on to your parents.

Btw how are you funding the renovation?

Cakeguts

Have you done this before with a property in this condition? If not how do you know how much it will cost to repair and how much it will be worth when done? It can easily cost twice as much as you think it will to repair because unknown problems come to light when you start the work. I can tell you now that you won't be able to do this in 3 months. What did your structural survey say about the property? Have you had a structural engineer's report?

Keep_pedalling

Apart from the property thing, I think your parents should be seeking some independent financial advice from an IFA. Sitting on piles of cash for the last 5 years at very low interest rates has cost them a small fortune against a well diversified investment portfolio over the same period.

Quincunx

Thank you to all the forum members for their advice and guidance.

My mortgage broker advised that a loan from my parents would cause a problem when it came to remortgage and strongly advised against it.

I know realise that I had the wrong mortgage product and sadly don't have the time to reapply.

I'll probably let this one pass, write off the structural survey, searches, and legal costs. An expensive lesson in how not to do it.

Pounds poorer but much wiser.

Again thank you for all your help.

ThinkingOutLoud_2

Keep_pedalling wrote: »

Apart from the property thing, I think your parents should be seeking some independent financial advice from an IFA. Sitting on piles of cash for the last 5 years at very low interest rates has cost them a small fortune against a well diversified investment portfolio over the same period.

So where does it say very low interest rates?
"in various 'high street' bank instant access and ISA accounts savings accounts and have been for in excess of five years."
- Various accounts implies some degree of selection - perhaps until recently maybe a 123 account or two at 3% or others offering even more for limited funds per MSE guides.
- ISA savings doesn't tell you if cash or stock and shares? But perhaps, that mix is balanced by their risk appetite and other savings?

There is no indication of the split between these or what else they have.

You maybe right, but it is an assumption without more facts.