Complicated!

Sarahspangles

_Penny_Dreadful said:

I’m really curious as to how you have a property that is seemingly owned jointly with your parents yet your parents don’t appear to be party to the mortgage or the secured loan. 

I wondered about that too, I looked at an earlier thread by Auntloo which I think partly explains.

During the pandemic Auntloo’s parents helped her and her sister (and respective families) by buying a house in which they could also temporarily own a share, and this helped everyone to relocate areas/jobs and provided continuity of childcare. All the funding came from sale of other properties, except that for their 30% share Auntloo and her partner needed a mortgage.

I assumed that as this was meant to be a short term arrangement, her father and sister (who she mentions were also named on the deeds) accepted they would be named on the mortgage. They may not be liable for the secured loan, which takes Auntloo/her OH’s borrowing against the property to the full 30% of its recent valuation of £700k.

Auntloo’s parents want to buy her/OH’s share for £175k which was 30% of the original price (thereby allowing Auntloo to clear the mortgage), and will also gift a c. 10% deposit for a more affordable house. I assume this reflects the original agreement/understanding. I’m not sure where her sister now stands/lives.

The issue is that Auntloo also needs to repay the £40k secured loan when they move, and can’t currently, and had not appreciated that it could not simply be secured on a new property unless there was equity to match.

Sarahspangles

llcooljayne1 said:

This is why I need advice!

Yes they are on the land registry and the deeds. So could we take our share of any equity and use that as a deposit if we could take our secured loan with us when we remortgage?

Since my previous reply I looked at your previous posts about this and can see the situation is complicated mostly because this is family!

As your parents were trying to help, maybe it’s unfair to expect them to pay you the increase in the value of your 30% due to house price inflation. It’s unfortunate that you now need that to clear the secured loan.

Realistically has your financial position improved since you moved? Is the £40k debt because you are spending beyond your income? You could be exposing your parents and sister to risk if you don’t have a plan to extract yourself from the home.

Sarah1Mitty2

llcooljayne1 said:

Thankyou. That makes sense. So my parents have said they will help us out with a deposit, we originally paid £582,000 for the house. How likely is it that we could port the mortgage? We are with NatWest. Also would the house have to actually go up for sale? 

I`m assuming that was many years ago if it is now valued at 700k?

Sarah1Mitty2

llcooljayne1 said:

I think it will just be the £175k as we need to sort the secured loan so I’m hoping we can take it with us.

the house price range we are looking at is between £280k and £350k but not even sure if that’s doable?

we have a savings account but I need to shop around to get one with the best interest rates 

Have you looked at money market funds?

Titus_Wadd

I don't think I'm going to be popular, and may sound like a cautious old biddy (probably some truth in that).
I'm worried about the secured loan.  Has this come from home improvements?  The benefit of home improvements themselves only last while you're in that house...or as a factor in raising the value of the house after the loan is paid off in my experience.
A couple of years ago OP, you were asking about consolidating personal debts considerably lower than the secured loan which is a concern.  I don't think I'd be looking to move or borrow anything more until that was nearly paid off.
Whatever originally tempted you to move to live with extended family, including childcare supplied by the children's grandparents, chance to live in a larger house, albeit shared or whatever ... it seems something you may have to accept for a few years longer.  In theory your plan to get on the housing ladder should have made it easier to service existing debts or start saving regularly.  
I can't comment on the way you might extricate your share of the family house, without knowing the details of any trusts created at the time of purchase.  Unless you can't stay because of an intolerable family dynamic, then I'd stay and work towards reducing your debts. 

Does your sister and family live there too? 
Does the split of household expenses seem fair between the 6 adults?
Which adults are named on the deeds a co-owners, which contribute towards a depositand/or mortgage payments? 
A deed of trust apportioning % ownership? 

I'm probably still not able to help, but someone here might.  You're right it's very complicated!  I think the solution will involve further compromise and require patience.  I hope you find a reasonable way forward.