how to protect house deposit

oompaloompa · #1 10-22-2016

So just had lunch with my sister, and she is worried, her son is just 22 and is moving in with girlfriend, same age. They are long-term and might be getting engaged.

They want to buy an apartment, and my sister wants to give her son the money for the deposit, which will be approx £50-80k, or they will not be able to buy, as the average flat around here is 350K, and they would get a mortgage for the rest...

him and her are both newly graduated and on their first jobs.

she is a nice girl, but has no lump sum to add to deposit, she will just have her income to help pay the mortgage.

My sister does not want to be the bad guy, but she needs to protect her sons deposit, in case of a split, in which case the girl will possibly walk away with half the deposit, even in a non-married situation...

anyone done an agreement or got experience of how to handle it..

btw, son just wants money and no agreements...and why doesnt she trust his girlfriend etc etc, so it is delicate..

#2 10-22-2016

You will need to get a solicitor to right up an agreement.

Such as in the event of them splitting the first 50-80k is entitled to your nephew. The rest would be split 50/50.

oompaloompa · #3 10-22-2016

yes, I know that is what I said, but he doesnt want a solicitor.......he thinks the girl will be upset, that we do not trust her ....

I personally think is just a kid that doesnt understand life...and should not be buying under non-protected circumstances....I hope he does not learn the hard way....

but my sister and the son says, them paying rent is expensive and a waste when they have the money to buy....

#4 10-22-2016

That's the only way for a legally binding agreement as far as Im aware.

Ultimately it's up to him and his girlfriend.... Then you sister has a decision to make whether she gives him the money based on whatever he decides.

Play · #5 10-22-2016

The thing is, separation does happen, and often times couples act irrational simply because they are irate. Hence such an agreement would prevent such catastrophe.

I think writing up an agreement is the best way forward. I think it's all about choosing your words carefully in how you tell the girl.

cool customer · #6 10-22-2016

I think that if your sisters son wants that sizeable lump sum he should take it based on the any stipulations that your sister feels the need to impose. No questions asked.

If he doesn't like it he can kiss it goodbye.

I'd rather protect my dosh than worry about hurting someones feelings. The girlfriend does not seem to be bringing anything to the table so she should be grateful. If she was not happy with your sisters stipulations she'll lose lout anyway since they will just be spunking more money on rent.

Sign it or suck it would be my approach!

rsot · #7 10-23-2016

The equivalent of the "prenuptial" is in order.

oompaloompa · #8 10-23-2016

next episode of the oompa family saga...

the boy now has said he will dis-invest a trust his grandparents left him, it has 150k in it, and he will get the deposit money from there, if it is not forthcoming from mum.....the trust was open for withdrawal at age 21.

the same principle applies though, from mums point of view......it should be protected...she does not care where the money comes from as it is all family money regardless....

if he loses some of trust money in a split, a threat has been issued by parents that he will forfeit an equal amount of inheritence as a punishment for his stubborn attitude.......do not know if they really mean this, but it is getting angry and messy......

chimera · #9 10-23-2016

Ouch! Thats messy!

Its getting awful personal, perhaps has more to do with his choice in girlfriend?

What a shame though, this will stick unless one side can relent. Though i imagine a lot of damage has already been done.

JamesNorth101 · #10 10-23-2016

Has anyone tried to talk to the GF... She may be totally understanding and agree to having a % split of the house lower than 50% would would be equal to the amount of money being lend

Another option is that the mum could 'loan' the kid the money and take a charge against the house. If the house then gets sold the charge against the house would be paid first.

chimera · #11 10-23-2016

Oh! James you just reminded me!

Family Equity Loan. There are some specialist lenders set up who do just that.

JamesNorth101 · #12 10-23-2016

Yep works in the same way as a FEL but it does involve lawyers and everyone being on-board for a FEL

Haidukken · #13 10-24-2016

I predict that it'll all come crashing down within 3-5 years.

Fresh off the boat(School) and starting their young lives with a straight 350k home? I smell trouble.

Either they will break up, go they will go ahead and have a kid also and then one of them will end up cheating on the other because they feel that they never had the youth they wanted.

JamesNorth101 · #14 10-24-2016

Ever the optimist @Haidukken

oompaloompa · #15 10-28-2016

I agree with Haid actually....too young.

Plus there is no commitment, they should only get a house if they are engaged or married, not at this stage....they are co-habitees and at any stage they are way more likely to breakup too ......but they have 'talked' about engagement...doesn't mean it will happen though...

the other money in his own name/trust will be used apparently now, so he will miss out on the deposit from mum and have to spend his 'own' money that he could have used for something else, eg. paying off a chunk of a mortgage later on, right now it is rolling up interest, but he wants to pull it out, all for the sake of not upsetting the GF. I have no idea if GF knows or what she has said about it.....