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Crashman Begins

The Mrs Family Propose To Go Halves On Our 1St Home

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The Mrs family want to go halves on our 1st home, mainly due to the fact that they cant get a mortage.

I will hopefully be in a position to look to get a mortage for our 1st home mid next year & the Mrs family keep suggesting

that they go halves with us. The Mrs wants to also go ahead with this, which leaves me with more doubts about her finances :angry:

Without getting into things too much they suggest that they would pay half our mortgage each month, which could possibly come from

thier good earnings / a non mortgaged rented investment (which would leave them with some extra cash / get them on the property ladder too ? thanks to me)

Advantages

More cash in my pocket each month

Baby Crashman would enjoy better quality of life

The risk would be shared

Mortgage would be paid off quicker

I could consider another property at the bottom of the crash in another 4 -5 years time ? to buy with them too ?

I could keep hoarding more PM's B)

I could invest/ help out my direct family.. because my Mrs would have with her family

Mrs family have good builder contacts / skills

Disadvantages

Place wouldnt be ours 100%

Uncertain of our future. Eg her family might want to sell / take equity etc

Feel like im not taking my own steps / risk.

Could cause family fued .. but so could buying by ourselves ?

What'd you think ?

Edited by Crashman Begins

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SarahBell'

family fighting. - Good family relationship

Why can't they get mortgage? Self employed / contract work

Do you want to live with them forever? They wont be living with us

Edited by Crashman Begins

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SarahBell'

family fighting. - Good family relationship

Why can't they get mortgage? Self employed / contract work

Do you want to live with them forever? They wont be living with us

The Mrs family want to go halves on our 1st home, mainly due to the fact that they cant get a mortgage.

but they won't be living with you? Don't understand.

What's the point in them getting a mortgage with you - it'll prevent them from getting a mortgage if they decide they want to buy a house of their own.

And there is no such thing as a good family relationship once you start talking money.

You'd need to work out what they expect from the deal -

and what you expect from the deal.

Being brutally honest now and rowing about equity that doesn't get exist is a good idea.

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SarahBell'

family fighting. - Good family relationship

Why can't they get mortgage? Self employed / contract work

Do you want to live with them forever? They wont be living with us

If they won't be living with you they're offering a share-buy liar loan BTL investment?

Ticks all the boxes for a nightmare within 5 years.

Avoid.

Edited by Hara

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The Mrs family want to go halves on our 1st home, mainly due to the fact that they cant get a mortage.

What'd you think ?

It will all end in tears.

You do not have 100% control.

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Sounds like a really bad idea to be honest. It was one thing to put money into property when it was on the up and up. If you buy together now you're likely to be looking at falls in prices and that will put pressure on family relationships.

Why can't they get a mortgage? Banks are still lending to people who are good bets. If they are a bad bet, why take the risk yourself that a professional wouldn't?

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sounds like you take the risk (mortgage deeds) but they want to 'invest' and make some HPI profits

if you go into negative equity, will they cough up? doubt it...

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It will all end in tears.

You do not have 100% control.

I've been in this situation.

You would want every possible aspect of the transaction drawn up by a lawyer: what happens if one party dies, or wants to sell or buy you out or there's a divorce or you can't sell etc etc. Will they own equity or debt plus a cost? Will they pay for running costs other than wear and tear which come along with owning a property? How are capital improvements paid for by you included in the final selling price? This will cost money. Get everything agreed before calling the lawyer. They will also recommend some stuff you would never have anticipated.

On it goes. You'll need triggers and process agreed and drafted in legalese for everything.

In my case, the other party decided they wanted to sell, valued the place whilst I was on holiday, then gave me four weeks to buy their share out at the highest valuation (because EAs always undervalue...) or to stick the house (my home) on the market. And that was with a "good" family relationship.

"Blood's thicker than water but money dilutes it" or something.

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avoid like the plague. imagine if the place drops by 20%, you can't keep up payments, and have to sell. Will they accept all the financial loss?

Suggest that they buy it outright and you rent from them. Say you think houses are going to fall in price, but you recognise it would be wrong to stop them going on their own judgement.

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As I understand it - you and wife get the loan and title deeds but her family pay half the mortgage each month. Is that right?

The only way this would work is to keep a strict tally of every payment they give you in a book and when you come to sell you say -- you have paid in 50% of payments therefore you take 50% of profit ? loss on resale.

you need this in a legally enforeceable contract tho, that they take their share of the risk as well as the profits

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you need this in a legally enforeceable contract tho, that they take their share of the risk as well as the profits

Also, if they are made bankrupt for whatever reason, their creditors have a claim on their portion of the house you are living in.

Too many variables.

Don't do it.

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The Mrs family want to go halves on our 1st home, mainly due to the fact that they cant get a mortage.

I will hopefully be in a position to look to get a mortage for our 1st home mid next year & the Mrs family keep suggesting

that they go halves with us. The Mrs wants to also go ahead with this, which leaves me with more doubts about her finances :angry:

Without getting into things too much they suggest that they would pay half our mortgage each month, which could possibly come from

thier good earnings / a non mortgaged rented investment (which would leave them with some extra cash / get them on the property ladder too ? thanks to me)

Advantages

More cash in my pocket each month

Baby Crashman would enjoy better quality of life

The risk would be shared

Mortgage would be paid off quicker

I could consider another property at the bottom of the crash in another 4 -5 years time ? to buy with them too ?

I could keep hoarding more PM's B)

I could invest/ help out my direct family.. because my Mrs would have with her family

Mrs family have good builder contacts / skills

Disadvantages

Place wouldnt be ours 100%

Uncertain of our future. Eg her family might want to sell / take equity etc

Feel like im not taking my own steps / risk.

Could cause family fued .. but so could buying by ourselves ?

What'd you think ?

The advantages sound flimsy and dependent on the good will and good behaviour of the Mrs Family. I would not set much store on these advantages. Even with legal contract to cater for every eventuality, there would be the cost and trouble of enforcing the contract if need be.

The disadvantages are real and more substantial.

To be honest, it sounds like a crackpot scheme devised by a scheming family with a hidden agenda.

I would avoid.

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I think it's great having two generations under one roof, that's how it should be as a way of fighting the high house prices scam. However you absolutely must have a prenuptial agreement for your marriage AND a contract for the agreement to share this house which protects you, or your Mrs could at some point try and divorce you and take the house.

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3:1

Minority stake.

Always outvoted.

2/3rds or women initiate divorce on the grounds of 'unreasonable behaviour'.

:blink:

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I have a rule:

"never do business with family"

When making an investment like this you need to have complete objectivity, and the ability to be a cold calculating *******. When family are involved (particularly in-laws) that will be simply impossible.

If you are dead set on this - get everything set down in a contract by a lawyer, and be prepared to take them to court for breach of contract. If you are not going to do that, then just don't bother.

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My mum and her husband made a big (six figure) bridging loan to his daughter a few months back. Now all hell's broken loose over repayment. As I understand it, they didn't get a proper contract, they just assumed that everything would be okay with a quiet chat.

Now it turns out that the parents' understanding of the terms and conditions bore no relation to the daughter's understanding. All the relationships involved are going to suffer because of it.

I wouldn't go within a mile of such an arrangement.

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Creative and unconventional arrangements can work really well between the right people where they have a good friendship and understanding.

This does not strike me as being in that category. It's just plain weird.

Avoid like the plague.

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Suggest that they buy it outright and you rent from them. Say you think houses are going to fall in price, but you recognise it would be wrong to stop them going on their own judgement.

^ This

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As I understand it - you and wife get the loan and title deeds but her family pay half the mortgage each month. Is that right?

The only way this would work is to keep a strict tally of every payment they give you in a book and when you come to sell you say -- you have paid in 50% of payments therefore you take 50% of profit ? loss on resale.

The problem would lie if they did not keep up these payments after a while.

I fear the OP will find that, even in this case, the losses are all his, but the profits are half theirs, even if they have missed payments here and their "due to difficult months."

OP - don't do it. You will regret it.

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The Mrs family want to go halves on our 1st home, mainly due to the fact that they cant get a mortage.

They won't be living with you, but want to "get on the ladder"?! These people are unlikely to be happy if houses don't always go up.

What happens if at some future stage you want to sell, but for less than you bought so you can trade up at the bottom of the crash? They could, depending on legal circumstances, block the sale or at least cause you major grief.

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Despite the notion that you personally will get the mortgage and not them, there is no way a bank is going to lend you money with that sort of deal going on.

On the one hand you would need to make sure that the "deal" was backed up legally, written up in a contract etc. But doing so would for me mean you would have no chance of getting the mortgage approved.

Apart from that I wouldn't get involved in this, I really cannot see a good reason to be doing it. There seems to be nothing in the deal for them whatsoever, best case scenario is they get a chunk of profit if and when you sell, which means you get less of one. Do you want to be in a situation where the place you call home is just an investment for somebody else, surely they will want a return on their money at some point.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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