using parents house to get funds to buy own house

Amadan90

Twenty Grand wrote: »

I'm in the same boat as yourself. Near 30, renting, want to buy by myself. There's a reason most people buy when they get settled and it's mainly money.
Just save save save. And keep saving.

You might want to move in a year for different work. You might meet someone and want to get settled.
Don't buy just because of the "renting is dead money" argument.
Buy when you really need to and can afford to.

Yeah, I'll rethink things.
I hope things go smoothly for you and you've got your own place sooner than later. Best of luck.

El Tarangu

Amadan90 wrote: »

Donegal

Fair enough - are you renting a place of your own at the moment? If you were willing to move back into a houseshare for two years, you'd be well on your way to having your deposit saved. Best of luck with it, anyhow.

Ursus Horribilis

If you've not done so, set up a direct debit to move money from your current account into a separate savings one. Then try not to dip into it. If you've any credit card debt or overdrafts, set about clearing those.

Most mortgage providers will only want 6 months worth of bank and credit card statements. That'll give you time to have those online gambling transactions roll off. I was asked for 12 months of savings account statements but I think that was just a standard thing for that provider.

Another thing to be aware of is that when you engage a solicitor, you'll be handing over a few thousand euros to them.

Dolbhad

As other posters have mentioned your parents re mortgaging would mean they need to pay that off by the time they are 65 (some banks lend to 68) so it’s not really an option as mortgage payments are really high. They could transfer the house to you but honestly no solicitor will get involved and sign off on an older couple signing over potentially their only asset to a child unless, at a minimum, a life interest to live in the property is put on the property. Then makes it useless for the bank as they won’t be able to do anything with it.

It would also mean they have no asset to leverage for fair deals scheme when they need it. So even if you got over the hurdle of the bank, any decent solicitor will advise your parents against doing so. Also you don’t say if you use siblings but if you do, I could imagine an issue with that also.

Possibly your parents could sell the house and down sized and give you a lump sum to help you purchase a house but that’s a huge burden to place on them.

It’s tough at the moment as all the ways around it during the boom that allowed young people get on the market alone are gone. But their gone for a reason and it’s because people were left with huge debt they couldn’t cover once there was any change in circumstances. So the intentions of your parents are lovely to try help you out but in reality, to protect both of you it’s not going to work.

Ideally you would live at home, I’d that’s possible and save all your money and see what mortgage you could get in a year or two. Maybe talk to a mortgage advisor and solicitor then and see if there is anything can be done.

It’s really tough trying to buy by yourself at the moment unless your on a high income/not needing to live in the major cities. Hope it works out for you.

bingbong500

Twenty Grand wrote: »

320k tax free from a parent.

My own opinion is that if you cant save 10-15k off your own back then you can't afford a mortgage and run a home.
Homes can easily cost you 5k a year if something goes wrong or you need to call a tradesman. Add in your bills and mortgage, etc.

I don't know what position your parents are in, but they could get easily f*cked over by remortgaging the house, or doing those dodgy home equity schemes.

This makes no sense. Rent costs more than a mortgage at the moment. You're saying if you can't pay rent of , say, 1200 a month plus save 1000 a month, you can't afford 900 a month. It's a ludicrous point to make.

jlm29

Dolbhad wrote: »

It would also mean they have no asset to leverage for fair deals scheme when they need it. So even if you got over the hurdle of the bank, any decent solicitor will advise your parents against doing so.

This is OT, and sorry for that OP, but this isn’t true. The reality is that his parents would be better off having no assets when they come to fair deal age/circumstance- fair deal is only fair for the people with nothing. If someone has assets, those assets will be depleted by the state. If someone has nothing, they get the same care, with no penalties. Assets need to be gone out of someone’s name for either 5 or 7 (my brain is a bit broken, I can’t remember which) years before fair deal is applied for.

Dolbhad

jlm29 wrote: »

This is OT, and sorry for that OP, but this isn’t true. The reality is that his parents would be better off having no assets when they come to fair deal age/circumstance- fair deal is only fair for the people with nothing. If someone has assets, those assets will be depleted by the state. If someone has nothing, they get the same care, with no penalties. Assets need to be gone out of someone’s name for either 5 or 7 (my brain is a bit broken, I can’t remember which) years before fair deal is applied for.

I deal with a lot of fair deals scheme for work. At this moment maybe your better off having no assets but in next 10 - 20 years and probably by the time her parents will need to access the fair deals scheme, they will be a lot worse off without any assets. It’s well known pensions and fair deal schemes are ticking time bombs. And for future generations you’ll want as much as you can to be able to take care yourself in old age. The government won’t be doing it for nothing.

Lumen

There are all kinds of scenarios where this can go horribly wrong.

For example, you die in an accident, the house has zero equity, they get sick and can't pay their new mortgage, you can't help them cos you're dead, their house gets reposessed.

Then they're childless (well, minus you) and homeless.

Twenty Grand

bingbong500 wrote: »

This makes no sense. Rent costs more than a mortgage at the moment. You're saying if you can't pay rent of , say, 1200 a month plus save 1000 a month, you can't afford 900 a month. It's a ludicrous point to make.

Is the OP paying 1200 in rent in Donegal?

bingbong500

Lumen wrote: »

There are all kinds of scenarios where this can go horribly wrong.

For example, you die in an accident, the house has zero equity, they get sick and can't pay their new mortgage, you can't help them cos you're dead, their house gets reposessed.

Then they're childless (well, minus you) and homeless.

If their only child is killed and they then instantly become too sick to work (And have no income/mortgage protection policy) I doubt they will care much about the house, and anyway, it takes years and years of not paying a mortgage to be evicted, AND they would still have 150k equity in the house anyway so absolutely no reason for homelessness at any point.

Can we maybe not catastrophise so much?

OP, my honest advice is take a breath, step away from this idea and have a think.

I really wouldn't recommend going down the road of getting your parents involved at all. You might be the bestest family in the whole wide world, but nothing breaks a family up quicker than money. Conventional risks aside, it's still far too risky in my opinion.

Get the deposit and hope for the best. Maybe they can help you drum up the deposit? They're still helping but if things go sideways you aren't in debt to them as much and it's much more forgiveable.

Amadan90

bingbong500 wrote: »

If their only child is killed and they then instantly become too sick to work (And have no income/mortgage protection policy) I doubt they will care much about the house, and anyway, it takes years and years of not paying a mortgage to be evicted, AND they would still have 150k equity in the house anyway so absolutely no reason for homelessness at any point.

Can we maybe not catastrophise so much?

This did escalate quickly, i went from asking about remortgaging a house, to me getting hit by a bus(dying) my parents getting sick and them becoming homeless.

Amadan90

Deleted User wrote: »

OP, my honest advice is take a breath, step away from this idea and have a think.

I really wouldn't recommend going down the road of getting your parents involved at all. You might be the bestest family in the whole wide world, but nothing breaks a family up quicker than money. Conventional risks aside, it's still far too risky in my opinion.

Get the deposit and hope for the best. Maybe they can help you drum up the deposit? They're still helping but if things go sideways you aren't in debt to them as much and it's much more forgiveable.

i think i should sort the savings aspect out first, maybe that would help more and if the deposit is a big problem, then hopefully my parents can give me a little helping hand (but some seem to think it's disgusting to get help, i guess i'm still a child :rolleyes:)

Amadan90

Amadan90 wrote: »

i think i should sort the savings aspect out first, maybe that would help more and if the deposit is a big problem, then hopefully my parents can give me a little helping hand (but some seem to think it's disgusting to get help, i guess i'm still a child :rolleyes:)

Well my personal opinion is not that it's "disgusting" or anything like that, but I wouldn't personally like to involve my parents in a scheme that could take a long time to sort out.


Getting a 20k loan off them, that you can chip away at over a few years means there's a light at the end of the tunnel. Wrapping them up in €100k of debt and a remortgage means you're gonna be paying it off for a long, long time and it's much more likely that the loan will complicate things such as death, illness, 'fair deal' scheme, etc. should any of those arise.

scheister

this thread is an interesting read for people looking to buy.

Buying a house is the most expensive purchase most people make in their life and as such needs to be thought out considerable.

Questions need to be asked such as

Would the new house be your forever home
How safe is your job
What prospects do you have in your job.

Things you can do now to help your case

Step away from the online gambling
Set up a savings account and pay a fixed amount into it each month

Plan ahead and see what savings you will have in x months and plan based on that but also remember the other expenses (legal fees,stamp duty, kitting out the house).
Have a look around and see where you can save money.

I would look and think about all the above before i even look at gifts/loans from parents.

JDD

Okay so.

If your parent's transfer the house to you, you can remortgage it to the tune of €100,000 as long as you fit the 3.5 times income criteria. The equity in the house will count for the "deposit" - you shouldn't need cash in the bank in order to draw down the mortgage.

Having said that, I'd imagine the bank will still want to see 12 months of regular savings (even if those savings don't add up to the 10% deposit) in order for you to pass their eligibility criteria. Different banks will have different criteria for this. It might be worth going to a broker to see what advice they could give you.

Don't worry about the Paddy Power bets, they don't mind that anymore. What they will look at is whether:
a) You have any loans, including credit cards or overdrafts;
b) Any unusual transactions, such as a large cash amount being deposited or withdrawn;
c) Whether you run out of money at the end of each month.

Apart from the 3.5 times income criteria and the scan of your accounts, they'll look at affordability. Unfortunately, paying rent that would be more than your mortgage payment isn't enough. I suggest you do the following:

Go on to the myhome.ie website - they've got a useful mortgage calculator. You'd probably get a mortgage at the moment at an interest rate of around 2.8%. Banks stress test this mortgage payment by an additional 2% so put in 4.8% as the interest rate. Work out your monthly mortgage repayments over a 30 year term.

In addition to this mortgage repayment you must have €1500 per month in take home pay. This is standard across most of the banks I believe. The €1,500 can't include any fixed costs, such as loan repayments or childcare, so any payments such as those are in addition to the €1,500. If you have that, and the 3.5 times income, plus regular savings and a bit left over in your account each month, you should be okay.

As other posters have said, if your parents transfer the house into your name, that pretty much maxes out any tax free inheritance you can get. That may not bother you and to be honest you're probably better getting the "inheritance" now rather than 30 years in the future. It negates your parents eligibility for the Fair Deal scheme if they need a retirement home. That's a big risk. Discuss that openly with your parents.

I think you should go for a mortgage in your own right. Your parent's could release some equity in their house in order to help you with the deposit if they don't have the cash themselves, but banks will look to see that you have saved 30-50% of the deposit yourself. A parent gift can't make up the full deposit. So that brings it back to you saving over the next year or two. I know it's hard when a mortgage payment would probably be €500 less than rent but there are creative ways you can go about it. If you need €7,500 in savings could your parents release €15,000 value from their house? They could pay you €7,500 in a lump sum, and say €300 in cash each month. You use your cash for your everyday expenses (don't lodge it to your account!) and then transfer €300 of your take home pay to a savings account. It's be a pain for 12 months, but it might be worth it?

Claw Hammer

Amadan90 wrote: »

explain to me the sadistic part? are you referring to the stress a mortgage would have on them, or you mean sadistic for another reason?

Two reason.
1. The fact that you are behaving like a child at your age.
2. The prospect of losing their home as a result of indulging your folly.
Look at what happened to Maire Cruise o Brien and Mary Yates.

afkasurfjunkie

Have you any siblings?

Dav010

Dav010 wrote: »

At 29 you are old enough to stand by yourself without your parents help. If you aren’t able to get a mortgage for the home you want, wait, don’t ask your parents to take on your risk. They worked hard enough for long enough to not have to worry about paying again for the home they live in.

I don’t think this is a very fair statement. A large proportion of people wouldn’t be able to buy or would have much bigger mortgages without help from family, this whole “stand by yourself” stuff is all a bit silly really.

Most parents would insist on helping their children to buy if they can. Now it’s a little different here if they have to remortgage as in most cases parents have the cash to help their kids out so I think them going as guaranteur is a much better option and once the op can pay his mortgage it will never be an issue for them. I get the impression you are looking down on people in general who get help from parents though which I never understood.

Amadan90

Claw Hammer wrote: »

Two reason.
1. The fact that you are behaving like a child at your age.
2. The prospect of losing their home as a result of indulging your folly.
Look at what happened to Maire Cruise o Brien and Mary Yates.

Show me where I've been behaving like a child? If you want to say the question or idea is stupid then okay. This was the reason I asked the question, to get information, to know if it's good or bad, and was there other options instead of the normal way to get a mortgage.

How many children are on forums asking questions about mortgages?

From what I've learned from this post, it's clearly a bad idea.
What could've possibly made me act like a child is if I asked this question and ignored anyone who gave me an answer I didn't want to hear.

You're entitled to your opinion but I strongly disagree with it.

Wyatt Hot Frog

Wyatt Hot Frog wrote: »

I don’t think this is a very fair statement. A large proportion of people wouldn’t be able to buy or would have much bigger mortgages without help from family, this whole “stand by yourself” stuff is all a bit silly really.

Most parents would insist on helping their children to buy if they can. Now it’s a little different here if they have to remortgage as in most cases parents have the cash to help their kids out so I think them going as guaranteur is a much better option and once the op can pay his mortgage it will never be an issue for them. I get the impression you are looking down on people in general who get help from parents though which I never understood.

Acting as a guarantor over the period of a 25 year mortgage is even more risk for parents.

I do look down on people who ask their parents to take on a huge debt into their retirement, I think it is stressful for them an selfish on behalf of the offspring. If parents have the means to gift a deposit or €100k to their children, fair do’s, it’s a great thing to do. But saddling them with debt after a working lifetime to pay off their own mortgage, sorry, no, that’s not for me whether you think that is silly or not.

The responsible thing to do, is wait until you can afford it yourself, if you can’t afford it, then you shouldn’t be buying, that is what got us into the last crash, easy credit and unserviceable debt.

Graham

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Graham

Graham wrote: »

Mod Note

The accommodation & property forum has particularly low ceilings. For your own comfort & safety, please get off your high horse before posting.

Thanks

It has a low ceiling for many things.