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Buying property - No mortgage for 2 years
Brunokid
Posts: 63 Forumite
A father is trying his best to help his son and daughter out by giving them both a hefty sum to put down as a deposit for a house each.
The son wants to buy now but the daughter won't be ready for 2 years.
If he was to give all off the money to his son, then the son repay half of it after 2 years (interest free) to his sister, it means that he wouldn't need a mortgage for the first 2 years.
I can see that the son would benefit from not having any mortgage payments for the first 2 years but then he would be be 2 years older when he becomes mortgage free.
Is it really worth doing?
The son wants to buy now but the daughter won't be ready for 2 years.
If he was to give all off the money to his son, then the son repay half of it after 2 years (interest free) to his sister, it means that he wouldn't need a mortgage for the first 2 years.
I can see that the son would benefit from not having any mortgage payments for the first 2 years but then he would be be 2 years older when he becomes mortgage free.
Is it really worth doing?
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Comments
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What happens if the father dies, the son dies or gets divorced? What if father and son or son and daughter fall out? Would son be able to get a mortgage in 2 years time? Or daughter either?
This would have to be tied up so tightly that I think it would be cumbersome. I'd be giving half the sum to each and letting son get on with his mortgage and daughter put the money into something that will earn her interest. That seem completely fair to me. Should daughter (or the son for that matter) decide to use the money instead for a trip round the world or spend it on the geegees then that is her choice as once it's in her account it's her money.
I'm assuming that father is so well off he's never going to need assistance from the local authority for his care in old age and is also in good enough health that he's unlikely to die while these gifts are still subject to inheritance tax.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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It would be a really foolish thing to do. This risks a big fallout out between the siblings, just make an equal gift to each of them.0
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To what end? He saves a little bit in interest but the money could potentially be earning more in savings so it doesn't make sense. Just give him half and the daughter half now.0
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Better to split at the beginning.
Both get their 50%
He gets a mortgage.
She can put in a 2 years fix savings account for example.
Better not to complicate things.0
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