Me and my dad are buying a house together and I want to know if it’s a good idea or not

[ambunny]

@strivingforgodsglory Problems:

1 Many auction properties unmortgageable, everything needs a 10% cash deposit paid on the day and balance within a month... it is for cash buyers generally.

Either you risk paying for a survey on something you might not buy, or buy without survey: caveat emptor

(correct me if I'm wrong here...)

2 Assume you in 30's dad in 50's now? even if you paid it off 100% in a decade, 'deprivation of assets' rules generally used to be about 7 years...so fast forward to 2040 earliest that you are complete. Also assumes Dad will be able to finance this mortage commitent long term.

You are stuck in an illiquid investment which may impact you if you wanted to upsize or move/have family/new partner etc

3 If Dad becomes ill/unemployed, a joint mortgage would be messy and housing benefit won't pay rent to a relative.

4 As many here have said, and from personal experience, money and family can be difficult and cause a lot of problems. Also if Dad has/was to get a long term partner then think through all possible implications here.

5 if you do this, have some pre-agreed formula that if the property was sold before being paid off, you can split the profit, or losses.

 

[kevingil]

@strivingforgodsglory I spend a lot of time looking at auction houses and the vast majority of them go for at least 15/20% above the guide price. The very few of them that don't you litterally would never want to buy.

 

[rawscot]

@strivingforgodsglory I just need to know where in the UK houses are 40k thanks

 

[cqbchase]

@rawscot I've seen some for that price in Hull.

 

[jonternet]

@strivingforgodsglory Seems like an odd arrangement. Why would he buy half a property, pay off his half of the mortgage and then transfer it to you? Why would he leave himself vulnerable should you then kick him out, sell it if you get into financial difficulties or get divorced, or if you die and leave it to someone else who charges him rent?

Can you afford all the repayments if he stops making his share as if not you are putting yourself at risk too.

Can neither of you afford to buy it on your own as that would make much more sense and be less risky?

 

[gwencallon]

@jonternet Prob so he can move into a home without them selling the house to pay for it....

 

[lifeaintagame]

@strivingforgodsglory Deprevation of assets for car home payments are not an issue. He's permitted to keep 23k of savings, so they could claim back 50% of the house minus 23k. Which might not be much if anything.

Inheritance isn't an.issue as the numbers are small.

The only real downside is you're on the hook for 100% of the mortgage if he fails to pay. And there's no guarantee he gifts you the property. So the question is, how much do you trust him?

One thing that I'm slightly suspicious of is why can't he afford this himself? Min wage is 23k. Why can't he afford a 45k property? Could he live with you for 6months to save up the other half of the fees and deposit?

Anyway, There's nothing here that would put me off. If I trusted my Dad I'd take a punt on this to help him out.

 

[hub781]

@strivingforgodsglory Be careful buying a house at auction. There are many reasons people put houses up for auction, repossessions, trying to quickly sort inheritance is possible but also as they're unmortgageable for a variety of reasons. It's possible there is dry rot, spray foam in the loft, leasehold with a short lease, weird restrictions in the deeds, ongoing structural movement, it could even be of non traditional construction amongst a whole host of other things. If that's the case you'll put your 10% deposit down and then find out you can't get a mortgage.

Even if you can get a mortgage it could turn out half the garden is really owned by someone else or serious repairs are required. You won't find any of this out until you buy it and have paid your deposit.

 

[viorelpuia]

@strivingforgodsglory Double that guide price at the moment!!

 

[ansres]

@strivingforgodsglory You’d need to find out if the treatment of the property needed to be dealt with specifically in his Will. Especially if you are not his next of kin or have other siblings.
You’d also need to find out about life insurance to cover his half of the mortgage, if he did die during the next 10 years.
The credit report sounds like an excellent idea too.

Usually I don’t like the idea of sharing these sorts of financial arrangements, especially with parents, I just think it’s too easy for things to go wrong. So do take care?

 

[susantexas1]

@strivingforgodsglory The only problem I see is your asking your dad to pay half of the mortgage for the term of the mortgage and then asking him to sign the full house over to you.
If you want the full house it would be better to just go it alone and let him live in it.
What's to stop your dad from refusing to sign the house over to you and then asking you for the money to buy him out.

Also do you have any other family, brothers or sisters. This could pose a problem in the event of death and dividing up the estates.

 

[urmork]

@strivingforgodsglory I’m curious, what are you actually getting out of this besides helping your dad out?

Also don’t forget, if you already have a mortgage, it could impact you getting another one in the future if needed.

I think I’m with others who suggest you get a mortgage on your own and charge your dad rent