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  • FIRST POST
    • Troubleandstrife
    • By Troubleandstrife 14th May 19, 2:59 PM
    • 2Posts
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    Troubleandstrife
    Helping adult child to buy advise please
    • #1
    • 14th May 19, 2:59 PM
    Helping adult child to buy advise please 14th May 19 at 2:59 PM
    Hi there,
    First time here and am hoping for some advice.
    We are a married couple both 57 years old with two adult children.
    Eldest is in a long term relationship and is hoping to buy
    Both her and her partner have stable professional jobs and have saved approx 30k as a deposit
    Younger son has only just finished uni and is an entry level poorly paid job at the moment.
    We have a house worth about 850k with a mortgage of around 200k tracker offset type mortgage.
    We also own outright a flat which we currently rent out its value is about 200k
    We both have reasonable pensions coming our way and our lump sums will pay off our mortgage with a bit not too much left over.
    My question is this- I am keen to sell the flat and give the children the money to get onto the property ladder
    My husband wants to increase our current mortgage and give our eldest child the 100k from this as he says our interest rate is so low.
    Youngest is not in a position yet to buy so we can sort him out later?
    He is keen to keep the flat as he says it will help us in our retirement and the kids would inherit eventually
    With my lump sum and his we could pay off the 100K we give our daughter.
    My husband intends to keep working and believes he can save enough to give the youngest his share within a bout 3 years.
    Is this a good course of action?
    Are we being generous with amounts we do not actually have?
    Any outside point of view would be really helpful
Page 1
    • silvercar
    • By silvercar 14th May 19, 3:51 PM
    • 39,116 Posts
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    silvercar
    • #2
    • 14th May 19, 3:51 PM
    • #2
    • 14th May 19, 3:51 PM
    Also want to help my children in a similar way.

    My question is this- I am keen to sell the flat and give the children the money to get onto the property ladder
    My husband wants to increase our current mortgage and give our eldest child the 100k from this as he says our interest rate is so low.
    Your husband's view keeps the option of selling the flat later to pay off the mortgage.

    No doubt there will be many who believe that our adult offspring should stand on their own feet, as we did. My view is that house prices are higher now (relatively and absolutely) than when we bought, so it makes more sense to help them now rather than for them to inherit enough to buy when they are already middle aged.
    • Troubleandstrife
    • By Troubleandstrife 14th May 19, 3:56 PM
    • 2 Posts
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    Troubleandstrife
    • #3
    • 14th May 19, 3:56 PM
    • #3
    • 14th May 19, 3:56 PM
    I know I just feel we have been so lucky and really want them to start living an independent life.
    • RonoB
    • By RonoB 14th May 19, 4:01 PM
    • 31 Posts
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    RonoB
    • #4
    • 14th May 19, 4:01 PM
    • #4
    • 14th May 19, 4:01 PM
    Hello. I’d say 100k is personally too generous however it’s your money. I think 50k is more
    Like it. My dad gave me 10k plus fees to get on the property Market and I’m very grateful for that but it was just enough for the deposit 10%. I was very lucky and delighted. I appreciated it but didn’t take it for granted. I then saved and paid for everything else on my own. My point is my nephews are getting figures that you are talking about and tbh they are spoiled and ungrateful and I personally think it’s because they have it far too easy. I’d help with the minimum deposit only ensuring they are saving and contributing financially themselves. Anyway just my view. Good luck. Your a great mum.
    • amnblog
    • By amnblog 14th May 19, 5:32 PM
    • 11,145 Posts
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    amnblog
    • #5
    • 14th May 19, 5:32 PM
    • #5
    • 14th May 19, 5:32 PM
    Sounds like they have enough saved to use a Government Scheme like Help to Buy to stand on their own feet.

    Giving your eldest 100K is one thing, giving her and her partner 50K each is quite another.
    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.
    • Joewasherein2019
    • By Joewasherein2019 17th May 19, 9:46 PM
    • 23 Posts
    • 3 Thanks
    Joewasherein2019
    • #6
    • 17th May 19, 9:46 PM
    • #6
    • 17th May 19, 9:46 PM
    If you can afford it give it to them,
    • enthusiasticsaver
    • By enthusiasticsaver 17th May 19, 10:20 PM
    • 8,552 Posts
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    enthusiasticsaver
    • #7
    • 17th May 19, 10:20 PM
    • #7
    • 17th May 19, 10:20 PM
    We helped our adult children buy a property but not in the amounts you are talking about and we had no mortgage and used our savings to help them so did not go into debt. As you are approaching retirement and even though asset heavy you will have 300k mortgage. Will you be going for another offset tracker? How will the remaining 200k be paid off if you will be using your whole lump sums just to pay off the 100k you plan on giving your adult daughter. Instead of saving for retirement your husband will be spending his last few years of working saving to give your youngest presumably a similar amount? That would not be my choice certainly. Helping our children is certainly high on our list of priorities but no way would we jeopardise our retirement and financial security.

    Firstly why such a high level of gift? Do you and your children live in a very expensive area? If your daughter and her partner have only saved 30k you are putting in a much higher stake. What happens if your daughter and her partner split? When were you both planning on retiring?

    I think I would think again about gifting large amounts of money you do not actually have. On the one hand he is saying keep the flat to help you in retirement and on the other he is considering taking on a further 100k of debt and committing to saving a further 100k to help your children on to the property ladder when they have their whole lives ahead of them to sort their finances out. Your time is limited. I agree with helping kids out but not doing everything for them. They presumably are still fairly young and saddling themselves with a heavy mortgage may not be the best option at this stage for them anyway.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • getmore4less
    • By getmore4less 18th May 19, 9:03 AM
    • 36,237 Posts
    • 22,316 Thanks
    getmore4less
    • #8
    • 18th May 19, 9:03 AM
    • #8
    • 18th May 19, 9:03 AM
    You need to start IHT planning as well as you will have a joint estate over 1m

    Income in retirement will be critical to any plan.

    What rate is your mortgage?
    What will the finances of the oldest purchase look like.

    Will your borrowing 100k be that much cheaper than them having the debt? (you pay out of surplus income)

    Will your lender give you another 100k

    when is full term on your current mortgage.

    When are you planning to take the lump sums.

    An option might be to while working direct all income to the offset so it is ready to draw down when one of them buys.

    One advantage of taking on debt to give the money away is it starts the 7y PET clock.

    Would the flat be suitable for one of them as their first property?

    What's the CGT exposure on that.
    Also chances are it won't be that income tax efficient while you own it if you are on decent wages.

    Plans for the 850k house,
    • Sea Shell
    • By Sea Shell 18th May 19, 9:19 AM
    • 1,936 Posts
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    Sea Shell
    • #9
    • 18th May 19, 9:19 AM
    • #9
    • 18th May 19, 9:19 AM
    By all means gift them money, but gift them equally and at the same time.

    If this means reducing the amount of the gifts, then so be it, you can always gift more later. But don't be seen to be penalising your youngest, just because they are not looking to buy right now.

    They are both adults, so let them decide what they use the money for.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • dimbo61
    • By dimbo61 18th May 19, 9:54 PM
    • 10,278 Posts
    • 5,576 Thanks
    dimbo61
    Have you looked at offset mortgages and friends and family offered by YBS.
    Your daughter needs Help now with a deposit but she has already saved 30,000 which is a 10 percent deposit on a 300K property.
    If the Bank of Mum and Dad can put money into an offset account helping your daughter and her partner save interest.
    You could also help your Son by starting a LISA ISA and drip feeding 4,000 a year into it.
    Helping the kids get on the property ladder with Offset mortgages which you can help Offset with any spare money from pension lump sums or selling of the flat.
    Simples really
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