# Can i get a CU Loan for a Granny Flat Renovation



## Brian_R_79 (11 May 2021)

Hi

Has anyone had experience with getting a large CU loan of about 75K to build and convert a garage into a Granny Flat in their parents home?
I am looking to move back with my parents and convert their garage for them to leave in so I can take care of them. I have a house with mortgage which i plan to rent out to cover mortgage while I move back to my parents house. Would a CU approve a loan for building work carried out where it is not my own house?

Any Advice would be welcome!


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## noproblem (12 May 2021)

Short answer is, Yes,  but it will depend on quite a few things and if it's in your name. It would also be an expensive way to go about it.


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## Pinoy adventure (12 May 2021)

I would assume so once you can meet the repayments and have some sort  of a decent record with them


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## Brian_R_79 (12 May 2021)

Thanks for the quick response. The Loan would be in my name and my wife name. It does look like an expensive option but I can't see how to get a mortgage as my parents house is staying in their name. A loan of 75K with Monthly payments of €1,311 would be managable once my existing house is rented. Any other ideas on how to finance cheaper without selling my house?


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## NoRegretsCoyote (12 May 2021)

Spry Finance offer lifetime loans to older people who have nor mortgage.

The rate would be less than a credit union but the default is that it is not paid off until their death.

It's probably cleaner if the loan is in your parents' name as well.


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## _OkGo_ (12 May 2021)

And in addition to using Spry Finance for the loan, there are very tax efficient ways to pay this loan.

Depending on your income and your parents income, it might make a lot of sense to use a deed of covenant






						Deed of Covenant - Query re Mechanics
					

Hi,  Is the following correct based on people’s experiences with Deeds of Covenant:  - I covenant €1k a year to an OAP, so I complete the form, make sure we meet the criteria, etc - I pay the OAP €800 - I’m deemed to have deducted €200 from the payment, but I don’t actually do anything or pay...



					www.askaboutmoney.com


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## Thirsty (12 May 2021)

Is there a reason you don't want to sell? Or could your parents move to yr house & sell theirs.

I see so many families fall out over these sorts of arrangements.

Don't forget you'll have to pay tax on rental income & all the usual hassle of being a landlord.


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## Gordon Gekko (12 May 2021)

I was going to suggest a Life Loan through Seniors Money/Spry Finance only others beat me to it.


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## Brian_R_79 (12 May 2021)

Thirsty said:


> Is there a reason you don't want to sell? Or could your parents move to yr house & sell theirs.
> 
> I see so many families fall out over these sorts of arrangements.
> 
> Don't forget you'll have to pay tax on rental income & all the usual hassle of being a landlord.


I thought of selling but I would see our house as an investment and potential source of Pension. We rented our house before as we moved abroad for a few years and I know all the taxes/troubles involved so I think I can budget for that correctly. It makes more sense to move to parents house and upgrade as it's bigger than ours and we could potentially be mortgage free in about 10 years if I can finance correctly and not fall into any tax issues.


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## Brian_R_79 (12 May 2021)

Thanks for the advice on the Spry Finance and the Deed of Covenant. I will look this up and make some calls.
*Just to clarify*

I should get my parents to get a Life Loan for the money we need for Granny Flat.
We want to pay this loan back as the house would be my inheritance.
I setup a Deed of Convenant, 1 with each parent, can my wife also to this so we could pay 10K per year back?
Only taxes I would be concerned about then would be rental income
Hope that all works out with leaving with parents!


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## NoRegretsCoyote (12 May 2021)

Brian_R_79 said:


> We want to pay this loan back as the house would be my inheritance.


Do you have siblings? Simple if you do. Complex if you don't.


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## Brian_R_79 (12 May 2021)

NoRegretsCoyote said:


> Do you have siblings? Simple if you do. Complex if you don't.


I don't have any siblings. Why would this make a difference? Could you explain please?


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## NoRegretsCoyote (12 May 2021)

Brian_R_79 said:


> I don't have any siblings.


I meant it the other way round, sorry.

The arrangement is more straightforward if you are the sole heir.


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## Brian_R_79 (12 May 2021)

NoRegretsCoyote said:


> I meant it the other way round, sorry.
> 
> The arrangement is more straightforward if you are the sole heir.


Thanks for confirming. I am starting to research. Any advice on who i should talk to regarding going over all this and confirming numbers? would and accountant or Money Advisor be best?


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## noproblem (12 May 2021)

Brian_R_79 said:


> I thought of selling but I would see our house as an investment and potential source of Pension. We rented our house before as we moved abroad for a few years and I know all the taxes/troubles involved so I think I can budget for that correctly. It makes more sense to move to parents house and upgrade as it's bigger than ours and we could potentially be mortgage free in about 10 years if I can finance correctly and not fall into any tax issues.


I would sell the house if it was going to give a good cash injection after everything's paid off. Renting one off houses is not the way to go anymore,  very few plusses for an owner today, lots of regulations and plenty of other trapdoors for you to fall through too. There's also the possible question of what happens if your parents ever need to move to a nursing home. With the house in their names a largish bill might ensue.


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## Brian_R_79 (13 May 2021)

noproblem said:


> I would sell the house if it was going to give a good cash injection after everything's paid off. Renting one off houses is not the way to go anymore,  very few plusses for an owner today, lots of regulations and plenty of other trapdoors for you to fall through too. There's also the possible question of what happens if your parents ever need to move to a nursing home. With the house in their names a largish bill might ensue.


Thanks for the advice. Yes, there are lots of potential issues ahead. At least now, I can look into everything in more detail and way up all the options. I have some calls planned to get more information and think about this properly.

Thanks for all you advice so far!


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## Brian_R_79 (16 Jun 2021)

Hi
I am still exploring the options with Finance and making progress. I do have one more concern inheritance tax which i hope someone can answer for me. I would like to keep our existing house and rent it out.. at least in the short term to see how it goes. With renovating my parents house, we will be increasing the value of the house to €450,000. I will inherit the house and i think i will face paying a big inheritance tax bill at the end of this, even though i will continue living in my parents house. Any ideas how I could reduce this if I decide to keep my Rental Property?


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## sadie (18 Jun 2021)

If I were you I would contact a Solicitor and talk through what your options are. It might be well worth the money for that consultation. 
They are dealing with these issues everyday. 
Those Senior money loans are not something to be undertaken lightly, at all.


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## Grueler (21 Jan 2022)

Can you repay a credit union loan of this size 85k early ?


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## ClubMan (21 Jan 2022)

Grueler said:


> Can you repay a credit union loan of this size 85k early ?


Can't see why not unless it's a fixed rate loan which may have early redemption penalty fees.


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## Pinoy adventure (22 Jan 2022)

Grueler said:


> Can you repay a credit union loan of this size 85k early ?



I would assume yes,but verify with credit union


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## Glammy (15 Feb 2022)

credit unions are lending for home renovations up to 75k. the loans can be repaid early without penalty. it is possible that one your parents could take out the loan and you make the repayments. with the credit union they are insured up to age 84..that means that the loan would be cleared by the credit union insurance should the parent pass away before the loan is repaid.


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## FearFolomh (5 Mar 2022)

Glammy said:


> credit unions are lending for home renovations up to 75k. the loans can be repaid early without penalty. it is possible that one your parents could take out the loan and you make the repayments. with the credit union they are insured up to age 84..that means that the loan would be cleared by the credit union insurance should the parent pass away before the loan is repaid.


The insured loan balance is repaid in full,* subject to terms and conditions and certain cover limits* which apply.
When borrowing from your credit union, a member is eligible for loan insurance cover* if they have not reached their 70th birthday (check with your credit union as this can be extended up to the 80th or 85th birthday*).


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