It’s a massive amount of wealth linked exclusively to the solvency and good will of one person.I am happy to lend to them on same T&C as Spry. (6.5% compounded monthly
This speaks to my above point. If you don’t have faith in their absolute ability to repay you then you probably shouldn’t dip your toe.In particular I will want the charge/mortgage to be registered against the property, can anybody recommend a cost effective way of doing that?
I'd disagree here; you want a charge so that the funds will be repaid from the sale of the property. I would imagine your Solicitor should be able to get this done for you.This speaks to my above point. If you don’t have faith in their absolute ability to repay you then you probably shouldn’t dip your toe.
It’s a massive amount of wealth linked exclusively to the solvency and good will of one person.
This speaks to my above point. If you don’t have faith in their absolute ability to repay you then you probably shouldn’t dip your toe.
In that case risk is pretty tolerable.It's less 5% of my savings.
I don’t want to be semantic but you are. Enforcing secured debt on Irish residential property is very hard no matter how solid your contract is. If their family member doesn’t want to repay you when they leave the house you are looking at expensive and protracted legal proceedings while they are alive.Goodwill is also irrelevant as there will be a loan/mortgage agreement so I am not dependent on the goodwill of the borrower to repay me
It seems like a strange retirement profile to be reliant on when the owner vacates the house which could span a range of decades.In short that type of return on investment would suit my retirement savings profile
If there is a charge on the property then it has to be paid when the property is sold - that's how mortgages work.Enforcing secured debt on Irish residential property is very hard no matter how solid your contract is.
why?strange retirement profile to be reliant on when the owner vacates the house which could span a range of decades
Yes...that is how Spry work and I would replicate thisI'd disagree here; you want a charge so that the funds will be repaid from the sale of the property. I would imagine your Solicitor should be able to get this done for you.
Am I right in saying that the idea is that there's no monthly repayment, the total is rebated once the borrower has passed away?
Well they can't sell the house as I would be the mortgage holder so even if they live on in a nursing home that is also okay by me.In that case risk is pretty tolerable.
I had misread your OP as suggesting loan balance was in or around the €335k.
I don’t want to be semantic but you are. Enforcing secured debt on Irish residential property is very hard no matter how solid your contract is. If their family member doesn’t want to repay you when they leave the house you are looking at expensive and protracted legal proceedings while they are alive.
It seems like a strange retirement profile to be reliant on when the owner vacates the house which could span a range of decades.
Not to speculate on house prices; this could be a factor, but there's risks with any investment.if the house declines in value over that period
There is so much equity in the house that it will take 25 years for the deal to be in negative equity. If house prices are lower in 25 years than present level then we have a lot more to worry about than house prices.Not to speculate on house prices; this could be a factor, but there's risks with any investment.
Long term however, I wouldn't see it as a dealbreaker.
If anyone has any thoughts on a Dublin based solicitor who might specialise in this sort of law it would be most welcome
Especially her new spouse.It's a standard mortgage.
Any solicitor should be able to draw it up for you. No need for a specialist who would be more expensive.
The law is important, but making sure that her beneficiaries won't be surprised and antagonistic in 20 years is much more important.
Brendan
Good point...It is effectively my house that could go on fire. Although the land value should still cover the debt owing to me for at least 10 yeas. The borrower has way more to lose if it goes up on fire....but either way a good point I hadn't consideredWould you need to insist on house insurance or could you take out the policy.
A friend once bought a property from a childless uncle, who maintained a right to life in the property. The uncle acted as the banker. My friend paid the 10% deposit and arranged monthly payments to cover the loan over a ten year period. In case of the uncle's death, the monthly payments were to be paid into the estate. The agreement was drawn up and tightly worded by a solicitor. Upon the uncle's death, his relatives came out of the woodwork, a number under the impression the house would be left to them. The uncle had not mentioned he had sold the house. The relatives put tremendous pressure on him to sell the house as they did not want to wait until the loan was repaid for their inheritance. It caused tremendous tension in his family and some continue to carry a resentment about it years later. In hindsight, my friend maintained while financially it was a good arrangement, the emotional price by the split in family relationships was high.
Upon the uncle's death, his relatives came out of the woodwork, a number under the impression the house would be left to them.
A family member is about to avail of a lifetime mortgage from Spry Finance. In short that type of return on investment would suit my retirement savings profile so I am happy to lend to them on same T&C as Spry. (6.5% compounded monthly) and they only re-pay the debt when they cease to live in the house.
The borrower will get a slightly cheaper deal as I won't charge arrangement fees etc and have agreed no early repayment charges etc. I can also provide the funds quicker than Spry and that is an issue for the borrower
I have covered off the CA tax implications as the loan balance is below 335k (and will be for 25 years even when compounded up).
Is there anything else that people can think to be aware of?
In particular I will want the charge/mortgage to be registered against the property, can anybody recommend a cost effective way of doing that?
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