Parent lending/gifting 50% of property price

jagnew1234

Hi, I am wanting to lend/gift my child half of the cost of a house and he will get a morguage for the other half to help get him onto the property ladder. What are the pitfalls. I would still like to retain a charge on the property in case any future partner of my son tries to claim half the house. Is this a thing that solicitors and morguage companies are used to dealing with. I am thinking of 50/50 on a house worth around £120,000.
Thanks

Pixie5740

Well which is it? Are you gifting him £60k or lending him £60k? If you are lending him the money that will reduce the number of lenders willing to give him a mortgage on the other hand if it is a gift it will be less of an issue.

Thrugelmir

The imposition of a charge on the property would be an issue for lenders. As would pose an issue should they wish to force a sale.

csgohan4

money and family shouldn't mix, what if you fall out with your son, good luck getting back the share back.


Putting charge on properties is something lenders frown upon as are loans. You cannot call it a gift and then recall the loan, it's called mortgage fraud

Thrugelmir

csgohan4 wrote: »

Putting charge on properties is something lenders frown upon as are loans. You cannot call it a gift and then recall the loan, it's called mortgage fraud

Lender would have to approve the second charge.

Keep_pedalling

Don't be such a control freak, just gift the money if you can afford it, especially if your estate is likely to be paying IHT.

SuboJvR

You need to decide whether you want to gift your son the money, or lend it, as mentioned above.

I think as well you need to consider carefully whether you want to do it if you're worried about him having a potential relationship break down etc. People get into long term relationships hoping they will last after all, and when you spend any length of time living together (especially if children are involved) and looking/paying for a house and its bills together, the other party does invest something.

Perhaps you could just help out with the deposit and let him do the rest on his own?

ACG

There are lenders who may do this but not all of them. It's probably worth speaking to a broker and a solicitor to confirm your rights.

amnblog

Few lenders will allow you to put a charge against the property, but they are out there.

Engage a good mortgage broker to guide you through this.