Dad wants a share of property

namsoni

xylophone wrote: »

Is your father in a position to lend you the whole of the purchase price of a property?

If so, a formal loan agreement could be drawn up by a solicitor whereby you would repay your father (interest/capital) over the term agreed and he would take a first charge on the property - ie, he would be your mortgagee.

He is, but I feel like him being my sole mortgagee would be an even worse situation than the one I almost ended up in. I'm now looking into buying with a friend, because sadly, I would trust my mate (and many others), a lot more than I'd trust my dad (and no, it's not just because of this).

G_M wrote: »

This is a real shame.

In these days, I really feeel for young people. Affording a property nowadays for a young person is so much harder than it was 'in my day'.

I used to be a strong advocate of the young standing on their own 2 feet and earning what they need. But watching my nephews and nieces struggle I am now much more sympathetic to the idea of parental/family help to get started with housing. In the south especially, it's often the only way.

You father clearly has resources. He also clearly wishes to help. But he also clearly has issues (of trust? of his own future financial security? whatever) and this is making it really hard for you to plan & move forward.

Thank you for being understanding. I did anticipate a backlash along the lines of being an entitled millenial, but actually most of you have been really empathetic. He does have big issues when it comes to money, and even said so himself this week, saying it is "psychological". He's always been like that, and the only thing I can really attribute it to, is that he was a refugee, and his family ended up with nothing after being quite wealthy. I think that's led to a paranoia about losing everything again. I can understand that, but if that extends to not trusting your family, then its a real shame. Que sera!

ukdw

Looking at AnotherJoe post and thinking out loud on this onet - To solve the hypothetical future divorces problem for a currently unmarried child then I wonder whether an agreement to give the money back to parents in the event of getting married in the future could work. Obviously the child wouldnt actually have the cash to pay them back before getting married so it would have to be made into an open ended loan at that stage. Appreciate that it could result a difficult conversations with a future fiance - but it would at least protect half the money from being lost in a hypothetical future divorce.

Also you could potentially argue that this agreement wasnt really relevant to the current mortgage provider as your whole mortgage affordability/house ownership situation would be changing substantially anyway if you got married in the future.

getmore4less

The Barclays option ties your dads money up for 3 years then if you are keeping your end of the bargain by paying the mortgage, he can have it back with interest.

regular lenders will not be happy with a loan.

by using te springboard it also has a 3rd party making the rules for loan so if he want to change his mind he is not dealing with you.

getmore4less

AnotherJoe wrote: »

Good question, I have no idea. Maybe neither but as interest ?

What do the terms of the loan say?

if it is tied to the value of the house when you write of the loan you most probably create a PET at the current value of that share not the original value of the loan, that has IHT implications

There's no concept of deprivation of benefits since i have other money and this is done very far in advance of any such need and no sign of it

Its a loan so the deprivation questions have not happened yet it is still one of your assets.
The time you need to consider any deprivation issues is at the time you write it off and convert it to a gift from a loan.