Buying with daughter

AdrianC

BurtieW said:

No, we are not talking about our daughter looking after us... if required we would be buying in care

How will you afford that, if you've given away all your property equity?

BurtieW

I wish I hadn't asked! We are not using all the equity from our house sale, and we run a business so have income, and I am an ex Police Officer so gave a full Police pension.
We just want a large family home with our daughter, son-in-law and grandchildren and want to know how to do it!

MobileSaver

BurtieW said:

We are not trying to defraud anyone! ... there must be some way of us buying a property together? A gift? A loan that is only repayable if the house is sold?

You have to stop referring to "a gift" when you have already admitted it's not a gift at all but an investment as far as you are concerned. For the avoidance of doubt, it very much is fraud if you tell the lender it is a gift when clearly it is not!

You can to an extent protect your daughter by gifting the 50% to her and having a deed of trust between her and her husband confirming the 50% deposit is hers and hers alone but 1) hubby may not be too thrilled at that and 2) it does not protect you if your daughter subsequently decides to spend/lose/will the money to her hubby or someone else. It does however mean if the marriage breaks up then hubby won't automatically get half the deposit unless your daughter agrees to it.

A repayable loan will drastically reduce the mortgages available.

Your problem is that neither you or your daughter/son-in-law can buy what you want without lending and a lender is unlikely to lend to someone who will be 89 by the end of the mortgage term.

Something else to consider, is the 50% deposit the vast majority of your net worth? If so does this mean your other two daughters will get little or nothing when you finally pass until your third daughter sells the property? (At which point where will the third daughter live?)

To be honest, alarm bells are ringing that your thirty-something son-in-law has a well-paid job but they have no savings towards a deposit...

youth_leader

Could either of you put an extension/annexe on your current properties instead?

AdrianC

BurtieW said:

I wish I hadn't asked! We are not using all the equity from our house sale, and we run a business so have income, and I am an ex Police Officer so gave a full Police pension.
We just want a large family home with our daughter, son-in-law and grandchildren and want to know how to do it!

It's something that you HAVE to think about properly.

You are either putting a substantial amount of your money into a very illiquid asset, or you're giving it away in a way that will rule out local authority contribution to costs.

Do not underestimate how high those costs can be, or just how difficult living in close proximity can be - there are many threads here regarding dementia, especially.

BurtieW

Local authority contribution to costs? What would these be?
We do understand the issues regarding living in close proximity,  we had always intended to do this.
Our daughter rents her property at the moment and as the rent is significantly higher than a mortgage they have not been able to raise the size of deposit needed to purchase a property of the size required.
Our other daughters are older, they are both financially secure and have their own property. They are fully behind this endeavour.
As I said we are happy to gift the money, but perhaps a 'deed of trust' is the way forward. Our son-in-law is perfectly happy with this.
A trip to a solicitor,  to discuss options, seems to be the best next move.

[Deleted User]

BurtieW said:

We are not trying to defraud anyone! It all seemed simple initially. My daughter and her husband have a mortgage quote in principal, and we have the funds for 50% of the.property. surely there must be some way of us buying a property together? A gift? A loan that is only repayable if the house is sold? Care is not an issue as we would be looked after at the premises if that is needed (and hopefully not for a long time as we are only 64 and fit and well).
Help!

Where did the mortgage in principle come from? Did your daughter and SIL get one directly from a lender or are they using a mortgage broker? If the latter have they revealed the source of the deposit? If the former then they need to see a mortgage broker. A 50% deposit coming from people who will also live in the property but don’t want to be party to the mortgage will rule out many lenders but an experienced broker should hopefully come up with a solution. 

pbartlett

there are three options here:

1. the 50k is a gift. give it to your daughter. downside is if she gets divorced and her ex walks away with the lot there is absolutely nothing you can do.

2. the 50k is a loan. you can decide to secure it if you want. in any case, the mortgage company need to know when she applies for the mortgage that she already has a debt of 50k. They may not feel able to offer her a mortgage.

3. you buy the house together but the problems withbthat have already been described by other posters.

getmore4less

Joint borrower sole proprietor come up quite often

This is the other way round 

There are lenders that will allow this although a broker here did say recently the main one(HSBC) has stopped doing them

The lender can protect themselves to be able to take possession of the property if there is a default.

There was a case on here a while back where the borrowers were not on the title  they borrowed the money to buy the place that someone else then owned. 

It was 2017 found it,  worth a read to get a feel for what needs to be looked at.

https://forums.moneysavingexpert.com/discussion/5763258/can-i-go-on-the-deeds-but-not-on-the-mortgage

I think it would make just as much sense for the lender to have everyone on the mortgage but use the "main borrowers" as the affordability tests on income and term.  

davilown

If you have the equity from your home as well, why don't you buy the property yourself and then have a private mortgage with your daughter and SIL?  That way, you can set any terms you want and it'll potentially be cheaper for them