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Settle my mortgage
Waza72
Posts: 2 Newbie
Morning all, my girlfriend has offered to pay off the balance of my mortgage to save me paying these inflated interest rates. Its just over 40K. She isnt gifting me the money because we want to set up via a solicitor a payment scedule every month untill the amount is repayed in full. Can anyone tell me if there are any issues with this offer EG with Tax etc. Any help or advice would be great thanks.
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An accountant can, this is not really the right place.
I cant see how there could be any tax unless she is charging interest (but I dont know).
That all being said, from past posts on here - loans from friends/family seems to cause a lot of problems.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
ACG said:I cant see how there could be any tax unless she is charging interest (but I dont know).That's the only tax implication I can see as well, but yes, a matter for an accountant.... and agreed on the risks involved being more relationship based than any practical matter like taxation.1
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You are wise to go via a solictor to get the details of her loan written down and agreed.MWT said:...... and agreed on the risks involved being more relationship based than any practical matter like taxation.
Just be aware that if you did split up, and she called in the loan, you might find it difficult to get a new mortgage for the amount you need to pay her. Personal loans are generally only available for upto £25,000, and Morgages often need to be for £50,000 or more.
It might be safer to continue with your mortgage and let her benefit from the high interest rates on her savings.The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.1 -
And she should want a registered charge over your property for that kind of money, what percentage of the property value does £40k represent?0
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Her will should also be updated to reflect what should happen to the loan. She may be happy to write off any remaining balance if you are still in a relationship with her were she to die. Alternatively you might want to take out life insurance on her, so that you can repay the loan should she die. This might be necessary if she has children from a previous relationship.The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.0
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