Helping out family

Mrs_pbradley936

I really do not know where to put this but I value to views of you on here so here goes. My son is living with a woman and they have a child together. The woman also has a 15 year old from a previous relationship. They live in a shared ownership house 50/50 with a Housing Association. The mortgage is currently being paid by the ex-husband but this is set to change when the boy is 16 (in a few months) then according to the agreement they had at the time the house will be sold they will divide the equity and everybody will live happily ever after.

My son thought that he would be able to get a mortgage and they would pay off the ex and remain in the house. That was the plan and it was all going along nicely until the credit crunch and now he cannot get a mortgage. Only a few places give shared ownership and so you are limited to start with. Mr husband and I could lend them the money it will be around £56K and they could pay us every month for the next 20 years or until we die but what would the pitfalls be?

missile

I have lent money to family members but it rarely gets paid back and never when agreed.

If he has sufficient income and a reasonable credit score he should still be able to get a mortgage. I suggest you speak to a mortgage broker. If he has insufficient income or a poor rating, then perhaps you would need to stand guarantor.

margaretclare

I think missile has stated very clearly what the main pitfall could be!

From past experience (similar to missile's!) I would give money if I could afford to, perhaps as an advance inheritance? But I would never again lend money to anyone, and especially not if it was money that I might have need of myself at some future time. £56K is a lot of money, and once it's gone, it's gone.

Farway

I think both above coments are very valid, lend them the money, but consider yourself lucky if it is ever paid back, in other words consider it a gift in your own mind, and never expect it back

If you can afford to do this then do it, otherwise you are chancing your & Mr future

Edinburghlass_2

Go and see an IFA or a Mortgage Broker with your son and see if they can get a mortgage with you as a guarantor?

firesidemaid

have they explored all the lenders that support shared ownership schemes?

for example a friend was going through the HA broker and went to get statements from her bank, Barclays, and then found out that they unexpectedly do shared ownership mortgages.

missile

I recently arranged a re-mortgage for my son and it was quite painless. I hesitate to recommend a mortgage broker on open forum, but if you want I will PM the company name and refer you to the guy who we dealt with.

candygirl

One of my older friends lent her son a lot of money £100k in fact to buy a house.He was meant to pay it back each month.They had no written legal paers drawn up , and guess what, he has now fallen out with her, and isn't paying the money back.:eek: :eek: :eek: :eek:
Be careful MRS B;)

pavlovs_dog

im not certain, but i think the fact that the OP isnt domiciled in the UK all year round might pose problems with her acting as guarantor (forgive me mrs P if that is no longer the case).

i would echo the advice above about exhausting all other avenues before loaning such a large amount of cash (unless you are secretly a millionaire )

Mrs_pbradley936

Thanks for your comments everyone. We have spoken to our solicitor about it and he suggested a few things that we should consider such as a Trust Deed (or is it Deed of Trust) he would come into the money when anything happens to us of course but doing this means that we take money out of our estate (we intend to mortgage our house worth a great deal more than 56K ). Actually we have one of those offset mortgages so do not even have to arrange anything for this amount. If we live for another 7 years apparently that makes a difference. I trust the solicitor to sort out all the legal side but needed some common sense from some of you.

I am domiciled in the UK and pay taxes here, I just spend winters in warmer places.

Mrs_pbradley936

Forgot to mention that the problem is in raising the money to pay off the ex-husband. He wants about 30K and the mortgage which they have to clear is 26K hence the 56K figure. They do not want to sell the house and unless we help them they will have to and move into rented. An unsecured loan is too expensive and the mortgage will not cover it because of the shared ownership.