My daughter of 20 is thinking about purchasing a starter house down the country for circa 150k. Rather than approach a bank for a mortgage now I was thinking of loaning her the money interest free and so she would be a cash buyer. In a number of years time when she hopefully buys/builds a house costing let's say €400k and takes out a mortgage on that house does she lose her first time buyer status ?
Interest free loan to daughter and first time buyer status query
- Thread starter Roro999
- Start date
“A borrower to whom no housing loan has ever before been advanced” according to the central bank.
If the house if bought for cash and there is no loan she would possible retain the status also according to the central bank. There is a list of criteria.
So in short it seems to be both yes and no depending on whether your loan to her is a “home loan”
If the house if bought for cash and there is no loan she would possible retain the status also according to the central bank. There is a list of criteria.
So in short it seems to be both yes and no depending on whether your loan to her is a “home loan”
It depends on which purpose you are talking about. There are different definitions if FTB.
For a mortgage, she'd be a FTB (assuming she doesn't buy together with someone who previously had a home loan).
However, for any other purpose where tax legislation applies she wouldn't be a FTB - e.g. Help to Buy scheme.
Brendan Burgess
Founder
- Messages
- 53,767
Is your daughter buying the house for herself to live in? If so, go ahead and don't worry about what status she will lose as it might not be relevant in a few years when she trades up to a €400k house.
But if she is buying to get on the housing ladder or as an investment, then it's probably not a good idea.
Keep your money. When your daughter is earning better money she can get a mortgage and with help from you get onto a higher rung on the ladder.
Brendan
But if she is buying to get on the housing ladder or as an investment, then it's probably not a good idea.
Keep your money. When your daughter is earning better money she can get a mortgage and with help from you get onto a higher rung on the ladder.
Brendan
Thanks. Sorry, I don't understand your 'no' reference in your reply. How can the loan be construed in any other way other than a home loan. As I said the loan is to purchase a starter house.
NoRegretsCoyote
Registered User
- Messages
- 5,766
If the loan is from a parent it won'tt appear on the Central Credit Register.
Thanks. Buying for herself to live in at least some of the time. Was thinking perhaps of rent a room too up to €14k.
Brendan Burgess
Founder
- Messages
- 53,767
Best to not buy it so.
She presumably needs accommodation somewhere else.
Wait until she is ready to buy close to where she works and lives.
Brendan
Yes.
Because she pays stamp duty.
Brendan Burgess
Founder
- Messages
- 53,767
Yes. But completely irrelevant to anything.
It's a distraction.
The actual term "housing loan agreement" is defined in legislation. Not by what someone thinks it is.
“housing loan agreement” means an agreement in writing entered into by a lender to provide a loan which is to be secured on a residential property;
Lend them 150k and don’t ask what it’s for. Then it’s just a loan and not a home lone. But when the bank goes to lend them money eventually that will be asked why they were paying X every month to a parent.
Read above, it's not a qualifying loan regardless.
Only if they're foolish enough to continue those repayments for the 6 months or so in advance of applying for a mortgage.