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Helping daughter with house purchase

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Looking for advice on how we can help our mid/late twenties age daughter out with a house purchase. 

She has recently become self employed and doesn’t have any proof of income to speak of. Hopefully that will change as she builds her business up. She has been renting with her partner  (a low earner, not in a position to get a mortgage). They had to move out of their last rental property due to the landlord selling and she is feeling insecure in her new home. Rental properties are like hen’s teeth here. As we are financially comfortable, we are wondering how we can help. 

She has about £35k ringfenced for house purchase (LISA and inheritance). We are early 60’s, own our own home without mortgage worth about £600k, a comfortable income and have secure DB pensions. A suitable house for her would cost about £220k- £250k in these parts. 

Any thoughts on the best way to help? Ideas we have had include the following: 

Provide a private mortgage for her. We do have an offset mortgage on our own home which is fully offset, but we could take out about £150k and add this to some of our savings to provide enough for a mortgage. The interest rate on this offset isn’t great, so we could remortgage to realise the funds.

Take out a joint mortgage with her as sole proprietor. 

Buy a house ourselves and rent it to them.

Let her take out the mortgage and find a lender who would allow us to be guarantors.

I am also mindful of her partner living with her and any complications there. They’re good kids and seem very settled together but you never know! 

Thank you for any advice you can offer. 
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Comments

  • DE_612183
    DE_612183 Posts: 3,786 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    . We are early 60’s, own our own home without mortgage worth about £600k,


    We do have an offset mortgage on our own home which is fully offset, but we could take out about £150k and add this to some of our savings to provide enough for a mortgage. 
    Sorry - can you just clarify - do you have a mortgage or not on your own home?

    Cou[ple of t hings - if you but and rent - you'd need a BTL mortgage, plus the stamp duty would be higher, you'd also have to become a landlord - it's straight forward.

    Becoming a guarantor might be an option - but you may only be able to get a mortgage for 15 years due to your age.

    I think a specialised mortgage broker is what you need...
  • Thank you DE, yes what I wrote was a bit confusing. We have an offset mortgage for £150k but it is fully offset with linked savings, so a nil balance on the mortgage.  

    Any ideas where I could look for a specialised broker? 
  • MWT
    MWT Posts: 10,256 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    DE_612183 said:
    . We are early 60’s, own our own home without mortgage worth about £600k,


    We do have an offset mortgage on our own home which is fully offset, but we could take out about £150k and add this to some of our savings to provide enough for a mortgage. 
    Cou[ple of t hings - if you but and rent - you'd need a BTL mortgage, plus the stamp duty would be higher, you'd also have to become a landlord..
    ... and it would need to be a regulated BTL mortgage as the intention is to rent to close family...
  • amnblog
    amnblog Posts: 12,728 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Do you really want to get wrapped up in lending money to your daughter, and by definition her partner?

    A smarter idea may be to purchase a property yourselves for them both to live in as tenants. As their situation improves and their incomes and relationship shows some stability, they could perhaps purchase the property from you.

    You do however need to consider stamp duty cost as you will pay an extra 3% on the purchase as a second property. 

    Speak to a good independent mortgage broker.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, 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.
  • silvercar
    silvercar Posts: 49,562 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    In very similar circumstances, we helped with a deposit and went on the mortgage, a joint borrower, single proprietor mortgage. Our son is the only one on the deeds, but the mortgage is joint.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • silvercar said:
    In very similar circumstances, we helped with a deposit and went on the mortgage, a joint borrower, single proprietor mortgage. Our son is the only one on the deeds, but the mortgage is joint.
    That’s very interesting Silvercar. Did you need specialist advice to arrange this, or did you just go to a regular high street bank? 
    It sounds like you didn’t do anything in particular to protect your share if your son is the only one on the deeds. 
  • amnblog said:
    Do you really want to get wrapped up in lending money to your daughter, and by definition her partner?

    A smarter idea may be to purchase a property yourselves for them both to live in as tenants. As their situation improves and their incomes and relationship shows some stability, they could perhaps purchase the property from you.

    You do however need to consider stamp duty cost as you will pay an extra 3% on the purchase as a second property. 

    Speak to a good independent mortgage broker.
    Thank you amnblog, that’s definitely a route we are thinking of. The stamp duty is rather off putting though. 
  • silvercar
    silvercar Posts: 49,562 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    silvercar said:
    In very similar circumstances, we helped with a deposit and went on the mortgage, a joint borrower, single proprietor mortgage. Our son is the only one on the deeds, but the mortgage is joint.
    That’s very interesting Silvercar. Did you need specialist advice to arrange this, or did you just go to a regular high street bank? 
    It sounds like you didn’t do anything in particular to protect your share if your son is the only one on the deeds. 
    We went through a broker, but us and some of our friends have done similar and all roads point to Barclays, so up to you if you want to use a broker. You can google ‘single proprietor, joint mortgage’ if you want to find lenders that offer this.

    We didn’t do anything to protect “our share” as we don’t think of it as “our share”. We gifted a deposit to both our kids when they bought their first home. The homes belong to them, One was buying with a partner so they could afford the mortgage they needed without our involvement. The other is very single and couldn’t get a mortgage on his own, which is why we went down this route. He has a spare room, so if he can’t afford the mortgage he has the option of taking a lodger. Worst case we could become liable for the mortgage if he got into difficulty, but in practical terms if your kids get into difficulty, you help them; so no difference.

    The only specialist advice is to sign something that you understand the deposit is a gift. For the JBSP mortgage, OH had to seek independent advice, basically 5 minutes and £200 with an alternative partner at the solicitor firm that handled the conveyancing.

    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • silvercar
    silvercar Posts: 49,562 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    amnblog said:
    Do you really want to get wrapped up in lending money to your daughter, and by definition her partner?

    A smarter idea may be to purchase a property yourselves for them both to live in as tenants. As their situation improves and their incomes and relationship shows some stability, they could perhaps purchase the property from you.

    You do however need to consider stamp duty cost as you will pay an extra 3% on the purchase as a second property. 

    Speak to a good independent mortgage broker.
    Thank you amnblog, that’s definitely a route we are thinking of. The stamp duty is rather off putting though. 
    Extra 5% from 31 March 2025.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • Thank you Silvercar, that is really helpful. I’ll certainly be looking at Barclays and good to know it’s not a terribly unusual thing to do. 
    Similar situation in that our eldest bought a house last year and was able to take on the mortgage himself. We gifted him a deposit for this, signed with the conveyancing solicitor. 
    I take your point about ‘our share’ and share your perspective on helping the kids out. 

    On the stamp duty point, how did it work with you and your son being joint mortgage holders? Did you have to pay the full 3% ( as you say going up to 5%!) with your son being a first time buyer? 

    Thanks again 


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