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Scrag Meister
20th February 2013, 11:18
My daughter and her fiancee are in the process of buying a house, for which I will be stumping up approx 25k deposit (15%).

How would you approach the legal side? Take a 15% stake on the mortgage, then being liable for any arrears if problems occur, or come up with some other form of contract to ensure that the money stays in the correct place, namely allocated to me. :D

Yes I will be seeking legal advice, but comments from experience are good too.

northernladuk
20th February 2013, 11:49
I thought in situations like this, even with best intetions, you are not going to see this money again so pay it some lipservice and then write it off?

Maybe get the daughter and partner to get an agreement that the deposit is hers so should they ever split up the money stays in your family at least, just to avoid arguments should the worst happen?

Scrag Meister
20th February 2013, 12:15
Current plan is to repay inline with the mortgage they take, so that it is seen as "The mortgage", rather than "Dad's deposit" and "The mortgage".

Have all the figures, calced and she can pay me monthly and lumps as the availability comes.

Ketchup
20th February 2013, 12:45
Current plan is to repay inline with the mortgage they take, so that it is seen as "The mortgage", rather than "Dad's deposit" and "The mortgage".

Have all the figures, calced and she can pay me monthly and lumps as the availability comes.

I borrowed some money off my dad with an ex many years ago, we broke up and things turned nasty. Make sure you sign a deed of trust outlining what happens on devolution of the the title and if possible register a second charge on the property with the land registry

BolshieBastard
20th February 2013, 12:48
My daughter and her fiancee are in the process of buying a house, for which I will be stumping up approx 25k deposit (15%).

How would you approach the legal side? Take a 15% stake on the mortgage, then being liable for any arrears if problems occur, or come up with some other form of contract to ensure that the money stays in the correct place, namely allocated to me. :D

Yes I will be seeking legal advice, but comments from experience are good too.

You need a pre nupt agreement that protects your 'share' in the transaction. There was an article in the torygraph about this the other week.

Due to the price of property, more and more parents are having to chip in to the deposit to enable their kids to buy a house. But at the same time, if the relationship goes tits up in the future (as they invariably do these days), the parents dont want the other partner flouncing off with the parents share.

So yes, get good legal advice and a pre nut. Its hard nosed but sadly, who can afford to kiss 25k goodbye?

formant
20th February 2013, 13:00
I borrowed some money off my dad with an ex many years ago, we broke up and things turned nasty. Make sure you sign a deed of trust outlining what happens on devolution of the the title and if possible register a second charge on the property with the land registry

Yeah, I was going to suggest a trust deed. You should be able to trust your daughter to pay you back eventually, but you'll want to ensure that if she and her guy break up, the 25k in equity remain hers.

northernladuk
20th February 2013, 13:02
Yeah, I was going to suggest a trust deed. You should be able to trust your daughter to pay you back eventually, but you'll want to ensure that if she and her guy break up, the 15k in equity remain hers.

So what happens to the other 10K?

VectraMan
20th February 2013, 13:09
Current plan is to repay inline with the mortgage they take, so that it is seen as "The mortgage", rather than "Dad's deposit" and "The mortgage".

Are the mortgage company aware of the deal? Have they included the £25K debt to you in the calculation of how much to lend? Presumably that's not the case in most of these situations.

jamesbrown
20th February 2013, 13:09
So what happens to the other 10K?

Check the sofa.

formant
20th February 2013, 13:14
So what happens to the other 10K?

Ooops, typo. ;)
Lemme fix dat...

Scrag Meister
20th February 2013, 13:15
Are the mortgage company aware of the deal? Have they included the £25K debt to you in the calculation of how much to lend? Presumably that's not the case in most of these situations.

I am happy with affordability as the total repayments for the Mortgage, the loan from me and the building and contents insurance premiums is the same as the rent they pay now.

@NLUK : My thoughts exactly, tulip I've lost 10k already. :D

geoffreywhereveryoumaybe
20th February 2013, 14:37
... granted Barclays aren't everybodys cup of tea.

Fandango
20th February 2013, 21:00
Gifting them £25k will also require them to take out an additional indemnity policy which costs about £200

basically it's to cover the bank incase you go bankrupt within 2 years because the trustee can claim that £25k back

IR35FanClub
20th February 2013, 21:33
... granted Barclays aren't everybodys cup of tea.
Saved me googling... i remembered an ad the other day where they were talking about this type of arrangement, (the one where the daughter keeps taking money off dad). Couldnt rememeber which bank though. lol.