Buying a house with family member

B

Blimey

New Member
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Hello
Looking for advice as to best way to help son purchase a house and still protect investment .
I want to loan 50,000 to son towards purchase of house , It would have to be a loan as I have other children as well .
Ideally once house is purchased , son would remogage and pay back the 50,000
How would one go about with structuring this arrangement ,would I be a shareholder in house ?or would they have full responsibility for mortgage and loan repayment ,
Can anybody tell me the best way to do this?
I want it to be a win win for all of us
He wants to get property and I have a sum of money to invest and hopefully get a better return than I am at moment
 
Hi,

There are some previous AAM threads on this subject here and they may offer some advice.

If you use the Google search option restricted to AAM only you will also get these on loaning your son money.
 
Blimey said:
Can anybody tell me the best way to do this?
Click to expand...
The best way is to not do this at all.

If you need this money and it is a proper loan, then you are not helping your son. The amount he can borrow for his mortgage will be reduced by your loan so it is no benefit to him. It would not count as a deposit because the bank will look for assurance that it is a gift.

Some people will disregard this and pretend its a gift. You shouldn't do this but if you do, he still won't be able to remortgage in the future to pay you back. No lender will top up a mortgage so that you can pay back someone else

If you try to buy €50k of the property and have this reflected in the property ownership, then your son will not get a mortgage because the bank would not give him a mortgage unless he owns the property outright.

You cannot be named on the mortgage either. The term of the mortgage would be dictated by your age

Basically if you want to help your son, give him a small gift of whatever you can afford and find something else to do with your €50k.
 
Your son wants to get on the housing ladder and you are in a position to help him do so, so it's absolutely the right thing to do.

And, yes, it's messy and there might be problems later. But it's messier if you don't do it as your son won't be able to get on the housing ladder.

Make it a simple loan although you will have to sign a note for the bank to say it's a gift. But tell him that repaying his mortgage and not going into arrears is the absolute priority over repaying you.

He will not be able to remortgage to pay it back under current bank practices.

So you may not be able to give the next child the same level of help.

So your approach depends on how much you have and how soon the other children will want to buy houses.

If there is another one ready in the next year or so and you have no more than €50k in total, give each one €25k instead.

Or you can say to the next in line, that you will help them but not for two years. Maybe by then, you will have saved some more and your son will have repaid some of the loan.
 
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