house deposit from relative

A family member of mine and her husband has offered to lend me a lump sum as a deposit for a house (about €20k). To do this they wish to release equity on their current home. The value of their home is worth about $100k more than their current mortgage but they are practically up to the max amount of borrowing allowed for a mortgage (ie 3 1/2 times combined income I think). They have a good credit history, are paying into an SSIA own and another asset worth about €30k. They have already remortgaged once before. I intend repaying them in a couple of years when I am due to obtain a lump sum myself. Do you think a financial institution would have a problem with this and are there any other implications involved?

Personally I think your relatives would be mad to lend you €20k given their current financial position, but that is not an answer to your question. The only way to find out if the banks will lend the money is to ask them. They will want to know what the loan is for, which might not help them, unless of course they lie.

I agree are you sure yu want to accept 30k when it seems they can't really afford to give it to you. What will happen if they need the money back befor you get this lump sum? It could cause a lot of hassle within the family.

If they took out the loan, would you then be in a position to give them the monthly payments due on it? Sounds like they would not be able to wait until you get your lump sum..

I think I have made it sound like they are struggling financially which they are not otherwise I would not accept. They basically would be hoping to remortgage to get the necessary funds ( ie increase mortgage from say €220k to €240k over 25 years). And yes I am in a position to help with their increased mortgage payments until I repay the debt.

Why can you not raise a 20K Lump Sum yourself instead of bleeding the relatives , it strikes me that one who cannot raise 20K deposit from their own resources and a bit of ingenuity and cunning cannot afford a 200k mortgage either ?

Your relatives could end up going from a 20 year to 25 year mortgage and therefore paying for 5 YEARS XTRA MORTGAGE PROTECTION , just for you and paying a premium for the other 20 years over what it would normally cost because they may be over 65 when the mortgage ends.

Have you offered to reimburse them that Protection Differential (in full) in 20 years time or for all of the next 25 years ?

howstrange said:

I think I have made it sound like they are struggling financially which they are not otherwise I would not accept.

Click to expand...

Any one with a mortgage of "3 1/2 times combined income" is struggling financially.