Parents Lending money to Children for mortgage - Declaration of Trust / Second Charge

looby-loo_2

I sincerely hope you do! Best wishes

kn0bby

looby-loo wrote: »

I sincerely hope you do! Best wishes

Thanks..

clutton_2

knooby - i also sincerely wish you well and that your relationship does indeed last forever -

However, you cannot blame the oldies for wanting a guarantee that their money is safe - after all - they could be lending you money for a long long time if the property market goes down and you end up in negative equity again .... they are taking a risk and you need to recognise that and work with them.

Re your "profit" on the purchase/sale - i assume that you have not included the purchase and sales expenses - i suggest your expenses will have wiped out any profit -

buying fees - solicitors fees, disbursments, mortgage broker fees, mortgage arrangement fees, valuation fees, moving fees,

selling fees - solicitors fees, estate agents fees, stamp duty (?), moving fees.

When buying and selling on a property - you can generally calculate 10% of the original purchase price as being the total cost of buy-selling - this means that you will have made a loss.

you are now going into a more expensive house with a £30k loan to repay as well .... please think this thru very carefully ........... plus i assume you will be saving towards the repayment of the £10k loan from the oldies .... even more outgoings ?

kn0bby

The 30k loan is included in my orignial 160k mortgage figure so this will be part of the new mortgage.

We have been told we dont need to pay bout the 10k unless we sell the property. the 10k was the wedding fund for my girlfriend, they gave her the choice of how she wanted to use it, for a house or a wedding.

We regards to affordablity. My current mortgage costs me £817 a month, the new one will cost about £1100 a month. I am in IT sales so i can only look at past figures.. My worse month yet i took home 1720, that leaves me with £418 a month after all bills have been taken out, eg, food, council tax, gas, fuel, i have accounted for everything. On an average month i take home 2092, leaving me with £790 after all bills paid. My GF earns about 1100 a month, and she will be with with about 250 a month. Of course our financial earnings will become one when we live together, so on a worse month we shall have nearly £700 left between us.

clutton_2

""the 10k was the wedding fund for my girlfriend, they gave her the choice of how she wanted to use it, for a house or a wedding."" -

if she had chosen to take the £10k for a wedding - would they have wanted that paid back ??????

you seem to have worked out the figures quite thoroughly

bw

silvercar

I can see that a 200k house between two of you is cheaper than a 150k flat on your own. 33% increases quoted do not convey the whole picture.

All this talk of splits of money is difficult. When I first bought with my OH, I earned more as he was still studying, later on I stopped work to be with the kids, so he was the main earner, now we are both earning well again. Had I come on here at various points in our history and asked peoples opinion on equity share the answers would have been varied. Don't worry about this, use your energy to keep your relationship going through all this sideline talk.

You are losing money because you are selling up and she is costing money because the dog is forcing you to sell up at a time that is not in your favour. If the dog really can't be left with the parents (good security for the 10k?) then this is a cost you have to bear.

My advice would be get the mortgage, then let her parents put a charge on the property. Agree with your girlfriend and the parents that as soon as you are financially able you will repay them the 10k and get the charge removed.

LillyJ

This idea that someone protecting their own interests means their relationship is somehow internally flawed is an odd one. Me and my OH have been together for 7 years, renting for 3 and are buying together at the moment. However we are still making sure that we know who has paid what in terms of big equity. As it happens we earn almost the same and so we are paying exactly half of everything (as we did when we rented), so the sums are slightly easier.
It makes sense to do so. There are always posts on here that say "my girlfriend cheated on me and now she is taking half my house blah blah" and the reply is always "why didn't you sort this out before you bought the house".

Nothing in life in definate, 7 years might seem like a long relationship and we plan to get married once we have saved up (just spent majority of savings on house and don't want to be left with no rainy day fund!) but my best friend's parents have just split after 27 years of marriage and 3 kids together.

It is not the same as splitting a meal out or anything. On a day to day basis, we pay half the bills, half the mortgage/rent, and then everything else is more or less shared, ie I do the shopping one week, he does the next, or I do it and he gives me some cash to cover it. He will treat me to a takeaway, I will get the DVD etc etc.
It is just like splitting the housework, which we also do.

obsessed_saver

It all seems so complicated. Why the rush to buy? Why not just sell your place, and rent for the time being?

Clear your debt, and build a decent financial foundation. You can also try out living with your girlfriend.

I'm sure you can rent a 2 or 3 bedroom house for less money than your mortgage repayment. Renting is often seen as "dead" money, but paying interest on the mortgage is also "dead" money, especially in the climate of falling house prices.

Don't let your emotion get in the way.

You and your girlfriend might feel ready to buy a place together, but don't think that as a sign of commitment or anything. It is a real practical undertaking, and buying a place and requiring a loan from her parents isn't very practical.

Save up your own deposit and leave the £10k for your wedding. Surely that is the path of least resistance for now?

I think renting is the best course of action for you and your girlfriend.