Crashman Begins Posted October 31, 2010 Share Posted October 31, 2010 (edited) 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 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 October 31, 2010 by Crashman Begins Quote Link to comment Share on other sites More sharing options...
SarahBell Posted October 31, 2010 Share Posted October 31, 2010 family fighting. Why can't they get mortgage? Do you want to live with them forever? Quote Link to comment Share on other sites More sharing options...
ShedDweller Posted October 31, 2010 Share Posted October 31, 2010 RUN !! Quote Link to comment Share on other sites More sharing options...
Crashman Begins Posted October 31, 2010 Author Share Posted October 31, 2010 (edited) 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 October 31, 2010 by Crashman Begins Quote Link to comment Share on other sites More sharing options...
SarahBell Posted October 31, 2010 Share Posted October 31, 2010 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. Quote Link to comment Share on other sites More sharing options...
Normal Posted October 31, 2010 Share Posted October 31, 2010 (edited) 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 October 31, 2010 by Hara Quote Link to comment Share on other sites More sharing options...
Coldberry Posted October 31, 2010 Share Posted October 31, 2010 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. Quote Link to comment Share on other sites More sharing options...
JJJ Posted October 31, 2010 Share Posted October 31, 2010 If they aren't going to live there, what's in it for them? Quote Link to comment Share on other sites More sharing options...
TeddyBear Posted October 31, 2010 Share Posted October 31, 2010 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? Quote Link to comment Share on other sites More sharing options...
Si1 Posted October 31, 2010 Share Posted October 31, 2010 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... Quote Link to comment Share on other sites More sharing options...
aussieboy Posted October 31, 2010 Share Posted October 31, 2010 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. Quote Link to comment Share on other sites More sharing options...
Once in a lifetime Posted October 31, 2010 Share Posted October 31, 2010 Don't do it. Explain to them you've got second thoughts, and watch the resentment and arguing before you even started this commitment. Quote Link to comment Share on other sites More sharing options...
wherebee Posted October 31, 2010 Share Posted October 31, 2010 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. Quote Link to comment Share on other sites More sharing options...
Si1 Posted October 31, 2010 Share Posted October 31, 2010 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 Quote Link to comment Share on other sites More sharing options...
Coldberry Posted October 31, 2010 Share Posted October 31, 2010 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. Quote Link to comment Share on other sites More sharing options...
Giordano Bruno Posted October 31, 2010 Share Posted October 31, 2010 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 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. Quote Link to comment Share on other sites More sharing options...
Saberu Posted October 31, 2010 Share Posted October 31, 2010 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. Quote Link to comment Share on other sites More sharing options...
R K Posted October 31, 2010 Share Posted October 31, 2010 3:1 Minority stake. Always outvoted. 2/3rds or women initiate divorce on the grounds of 'unreasonable behaviour'. Quote Link to comment Share on other sites More sharing options...
LJAR Posted October 31, 2010 Share Posted October 31, 2010 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. Quote Link to comment Share on other sites More sharing options...
Selling up Posted October 31, 2010 Share Posted October 31, 2010 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. Quote Link to comment Share on other sites More sharing options...
Laughing Gnome Posted October 31, 2010 Share Posted October 31, 2010 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. Quote Link to comment Share on other sites More sharing options...
23rdian Posted October 31, 2010 Share Posted October 31, 2010 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 Quote Link to comment Share on other sites More sharing options...
Tiger Woods? Posted November 1, 2010 Share Posted November 1, 2010 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. Quote Link to comment Share on other sites More sharing options...
Tiger Woods? Posted November 1, 2010 Share Posted November 1, 2010 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. Quote Link to comment Share on other sites More sharing options...
gilf Posted November 1, 2010 Share Posted November 1, 2010 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. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.