Give or loan towards DD’s down payment?

Advice please from others who have similar experiences...I need to remortgage to pay off an expiring mortgage, but cannot show enough income on my own, and at my age, to support the amount needed. My single son and daughter live with me and are unlikely to ever move out. My daughter claims disability benefits and cannot work. Son does not earn a huge amount but it is enough for us to be able to borrow jointly the sum needed, which would help keep a roof over both their heads. I understand my son and I could legally become Tenants in Common but how do I protect my remaining children if son owns even a small part of my house?

Tamayra

Perhaps look into a Family Trust saves all sorts of problems with tax including inheritance ones
That’s the route I choose.

Family Trusts are not so always so straightforward as they are not only expensive to administer but also require a very competent legal expert to ensure that they will achieve exactly what is intended if they are challenged at a later date.

newnanny

mokryna

Oopsadaisy1 They have the mortgage already in place.
I remember when I was starting out and the bank rate always going up. It would be treated as an advance on DD’s inheritance.

My youngest DS just bought his house in July and moved in last weekend. I gave him £55k towards deposit. He saved up £10k and solicitors fees. He's only going to be living 4 miles away from us. My other 2 DC live 120 miles and 150 miles away so I'm thankful he will be closer. I paid 10 percent deposit for other 2DC but they have had other help. I've helped pay nursery fees for 2 DGS's so my DD could continue to work. I've paid for DS1 to do his Class 1 driving lessons and examination as he used to be Class 2 but now earns more money driving Class 1 lorries. I don't give them money for frivelous reasons. I've spoken with older 2 siblings and they are both happy for DS2 to get money now and have a bit less when I die. I'd really rather see them using and enjoying the money whilst I'm alive. If you can afford to gift then I'd do so providing you discuss with other DC and it won't cause conflict. You could do as I'm doing and just leave DS2 a bit less in my will.

Yes newnanny I agree that I'd rather see them enjoy the money whilst I'm alive. I've done the same for all four children so no confllict.

We helped our children when they bought houses and they all said they'd repay us when they could afford it. None of them did manage to do this which is fine as we don't need the money ourselves.
It's probably better to just give it to her as a gift, this takes the money out of your estate if you live for seven years.
I suggest that you give it to her solicitor with the instruction that it is to go towards the house purchase, that way if the purchase does not go through you will get it back.
We never got any help from either set of parents ourselves either, but it makes far more sense to give them money now when they need it rather than wait until we die - at which stage Inhertitance Tax map be payable and they may not actually need the money so much any more.
This way they can live somewhere nice whilst their children are young and be under less financial pressure. It also gives them a better house to sell later when they decide to downsize, and hopefully help their own children to set themselves up.

A little word of caution, in the event of divorce it makes no difference where the money came from it's just joint so each will get half. You need to put an attachment on the property if you would like it returned. You could, later on, gift it to your own AC. No one knows the future. Speaking from experience.

Nannan2

One of my sons (who lives at home still) and i were thinking of considering either getting a mortgage or buying a share together in a shared ownership scheme (both applying, both paying deposit, both being on deeds, both living in the house) but i have no real large amount to inherit later when i die, so how would this impact on him when i did? As regards to house or otherwise?Also what are the effects it may have on his younger brother if he was not to join us in doing so but still needed to live there after i did pass, along with his brother, just as a family member.?We dont want to just dive in to a big debt with this only for it to impact on either son later on.I have no husband or partner only living with 2 adult sons at home.

Would you qualify for a mortgage? Does your son? Age and income are relevant. If you were party to the mortgage and died your son would remain wholly responsible for it. Could he afford that?
I don’t know what you propose as regards the other son. What happens if you and his brother move out?

Sorry, Nannan2, I didn't mean to read and run but I think the situation with what you need is quite complicated. I think you need to look at the different forms of ownership to determine how to buy the house and still get your other son to inherit.
We bought a house with my grandfather many years ago and we had a solicitor's agreement drawn up to determine all the different things we needed to consider. He was happy with the house as was, we wanted to make improvements so that had to be taken into consideration on inheritance or sale. He wasn't going to live with us so that had to be written in that he had no right to live with us and under what conditions he could force us to sell. As it was, when he got ill, he moved in with us and by the time he died, he had kindly transferred the title lock, stock and barrel so we didn't have huge fights with the executors of his will!

And to help OP, after reading all these tales of woe on here, yes i would gift it if i was in same postion.

👻😆

Norah, thank you for at ĺeast acknowledging my question.🙂 i was starting to feel like i was being 'ghosted' by the whole group🤔🙄

Theres a good advice section on IHT on the moneysavingexpert website which gives some examples ìn laymans terms.Just found it.

We gifted to both of our adult children. It’s really difficult for them now when buying property.

I have gifted a lump sum for house deposits to my two boys and their partners ( now wives) . I had to sign some forms to say it was a gift and I wouldn’t ask for it back . I felt happy to help them now and not when I’m dead !

I gave a large down payment "gift" to my DD and SiL. I was happy to be able to do it. He or his family did not provide any cash assistance. Years later in a nasty divorce the SIL got the house . He sold it and kept all the proceeds and walked away, and my daughter and grandchildren had to move out. Advice: Be prepared that if things go wrong, your heart was in the right place. But your heart will also be broken.

I've done it, and it was a gift. It leaves me a bit short, but I am in the fortunate position of being able to take on interim work during my retirement, so I can top up the coffers when
necessary.

Thanks Stanlaw, fortunately all my offspring are in finance one way or another and well advised thankfully as one did already go pearshaped.

Nannan2

One of my sons (who lives at home still) and i were thinking of considering either getting a mortgage or buying a share together in a shared ownership scheme (both applying, both paying deposit, both being on deeds, both living in the house) but i have no real large amount to inherit later when i die, so how would this impact on him when i did? As regards to house or otherwise?Also what are the effects it may have on his younger brother if he was not to join us in doing so but still needed to live there after i did pass, along with his brother, just as a family member.?We dont want to just dive in to a big debt with this only for it to impact on either son later on.I have no husband or partner only living with 2 adult sons at home.

I've no idea, I hope someone knowledgeable will tell you soon.

Has anyone any advice on my question about buying or shared ownership buying along with adult son please?

mokryna

Oopsadaisy1 They have the mortgage already in place.
I remember when I was starting out and the bank rate always going up. It would be treated as an advance on DD’s inheritance.

My youngest DS just bought his house in July and moved in last weekend. I gave him £55k towards deposit. He saved up £10k and solicitors fees. He's only going to be living 4 miles away from us. My other 2 DC live 120 miles and 150 miles away so I'm thankful he will be closer. I paid 10 percent deposit for other 2DC but they have had other help. I've helped pay nursery fees for 2 DGS's so my DD could continue to work. I've paid for DS1 to do his Class 1 driving lessons and examination as he used to be Class 2 but now earns more money driving Class 1 lorries. I don't give them money for frivelous reasons. I've spoken with older 2 siblings and they are both happy for DS2 to get money now and have a bit less when I die. I'd really rather see them using and enjoying the money whilst I'm alive. If you can afford to gift then I'd do so providing you discuss with other DC and it won't cause conflict. You could do as I'm doing and just leave DS2 a bit less in my will.

Any advice grateful from those whom may have any knowledge on this please?

From my reading though, if there is not enough money in the Estate and money given away is subject to tax, the person who received the loan will be liable. Is that right GSM?

One of my sons (who lives at home still) and i were thinking of considering either getting a mortgage or buying a share together in a shared ownership scheme (both applying, both paying deposit, both being on deeds, both living in the house) but i have no real large amount to inherit later when i die, so how would this impact on him when i did? As regards to house or otherwise?Also what are the effects it may have on his younger brother if he was not to join us in doing so but still needed to live there after i did pass, along with his brother, just as a family member.?We dont want to just dive in to a big debt with this only for it to impact on either son later on.I have no husband or partner only living with 2 adult sons at home.

stanlaw

As a divorce lawyer I would urge every family giving money to offspring for a house to get legal advice abut ringfencing the gift as far as possible so that it is clear it is an advance inheritance to offspring only and not to their partner or spouse. This is certainly not watertight but could help if there's a split.

I'm not very comfortable with that idea, though I see some might prefer to do things this way.
My mother gave DH and me a house jointly when we got married, because in her words, "I am giving away something more precious than money " ie her daughter!"
DH and I have followed that through when we gave our own children and their spouses properties. I would hate them to start a marriage thinking that we didn't trust the other half, though I know break ups can get messy.

Perhaps look into a Family Trust saves all sorts of problems with tax including inheritance ones
That’s the route I choose.

We lent our son the deposit. We were not very well off ourselves. We had a savings bank book and he regularly paid a certain amount in every month until his debt was paid.