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AnthonyL February 28th 17 07:23 AM

Private mortgage
 
I've moved house and haven't yet sold the previous one, which is owned
outright.

Over the winter my nephew has been living there and now is interested
in buying it but would struggle to get a traditional mortgage due to
th nature of his work.

From my point of view I need some capital and some income to
supplement my pension. With this in mind I wonder what happens if I
go along the lines of saying that payments he makes over a certain
level will go towards his equity in the property. So if he puts a
lump sum of 20k in then he's bought a 10% share for instance. We can
agree a base interest rate and anything paid above that goes towards
equity.

Just looking for some thoughts and ideas before we agree a plan which
most likely will need professional involvement as clearly there will
be tax and other implications.

--
AnthonyL

Ophelia[_5_] February 28th 17 08:44 AM

Private mortgage
 
"AnthonyL" wrote in message
...

I've moved house and haven't yet sold the previous one, which is owned
outright.

Over the winter my nephew has been living there and now is interested
in buying it but would struggle to get a traditional mortgage due to
th nature of his work.

From my point of view I need some capital and some income to
supplement my pension. With this in mind I wonder what happens if I
go along the lines of saying that payments he makes over a certain
level will go towards his equity in the property. So if he puts a
lump sum of 20k in then he's bought a 10% share for instance. We can
agree a base interest rate and anything paid above that goes towards
equity.

Just looking for some thoughts and ideas before we agree a plan which
most likely will need professional involvement as clearly there will
be tax and other implications.

AnthonyL

===

If you don't get what you need here, try uk.legal.moderated.


--
http://www.helpforheroes.org.uk


Roger Mills[_2_] February 28th 17 09:53 AM

Private mortgage
 
On 28/02/2017 08:23, AnthonyL wrote:
I've moved house and haven't yet sold the previous one, which is owned
outright.

Over the winter my nephew has been living there and now is interested
in buying it but would struggle to get a traditional mortgage due to
th nature of his work.

From my point of view I need some capital and some income to
supplement my pension. With this in mind I wonder what happens if I
go along the lines of saying that payments he makes over a certain
level will go towards his equity in the property. So if he puts a
lump sum of 20k in then he's bought a 10% share for instance. We can
agree a base interest rate and anything paid above that goes towards
equity.

Just looking for some thoughts and ideas before we agree a plan which
most likely will need professional involvement as clearly there will
be tax and other implications.


You're going to need legal advice about this. For example, what happens
if you die before he's bought all the equity? Would he have any security
or could your beneficiaries demand that he sell it so that they can get
their legacies?

If you do go down this route, might it be simpler to - in effect - lend
him the money to buy it off you? If (say) you agree that it is worth
200k and he pays a 10% deposit, you receive 20k capital now and lend
him 180k. He makes monthly payments calculated to pay the interest
*and* pay off the debt over an agreed time period. You get a regular income.

He gets all of the equity straight away but the debt is registered
against the property, enabling you to re-possess it in the case of default.
--
Cheers,
Roger
____________
Please reply to Newsgroup. Whilst email address is valid, it is seldom
checked.

AnthonyL February 28th 17 11:47 AM

Private mortgage
 
On Tue, 28 Feb 2017 10:53:25 +0000, Roger Mills
wrote:

On 28/02/2017 08:23, AnthonyL wrote:
I've moved house and haven't yet sold the previous one, which is owned
outright.

Over the winter my nephew has been living there and now is interested
in buying it but would struggle to get a traditional mortgage due to
th nature of his work.

From my point of view I need some capital and some income to
supplement my pension. With this in mind I wonder what happens if I
go along the lines of saying that payments he makes over a certain
level will go towards his equity in the property. So if he puts a
lump sum of 20k in then he's bought a 10% share for instance. We can
agree a base interest rate and anything paid above that goes towards
equity.

Just looking for some thoughts and ideas before we agree a plan which
most likely will need professional involvement as clearly there will
be tax and other implications.


You're going to need legal advice about this.


As I just said in the paragraph above.

For example, what happens
if you die before he's bought all the equity? Would he have any security
or could your beneficiaries demand that he sell it so that they can get
their legacies?


That could readily be catered for in a Will though eg 5 years to sell
or pay up.

If you do go down this route, might it be simpler to - in effect - lend
him the money to buy it off you? If (say) you agree that it is worth
200k and he pays a 10% deposit, you receive 20k capital now and lend
him 180k. He makes monthly payments calculated to pay the interest
*and* pay off the debt over an agreed time period. You get a regular income.


Reverse problem of the above would now apply re provisions if I die?

He gets all of the equity straight away but the debt is registered
against the property, enabling you to re-possess it in the case of default.


But yes the idea has merits and I guess is effectively a "private
mortgage" isn't it?

--
AnthonyL

burfordTjustice[_2_] February 28th 17 01:07 PM

Private mortgage
 
On Tue, 28 Feb 2017 08:23:00 GMT
lid (AnthonyL) wrote:

From:
lid (AnthonyL)
Subject: Private mortgage
Date: Tue, 28 Feb 2017 08:23:00 GMT
Newsgroups: uk.legal,uk.finance
Organization: A noiseless patient Spider
X-Newsreader: Forte Free Agent 1.21/32.243



Use one or forever be screwed.

According to the Law Society, as at 31st July 2011, there were 159,524
solicitors on the Roll; which means that since 1981 the total number of
solicitors holding practicing certificates had grown by 206.4% at an
average annual rate of 3.8%. There are two major legal professions in
the UK – barristers and solicitors.


AnthonyL March 1st 17 11:30 AM

Private mortgage
 
On Tue, 28 Feb 2017 09:07:30 -0500, burfordTjustice
wrote:

On Tue, 28 Feb 2017 08:23:00 GMT
(AnthonyL) wrote:

From: lid (AnthonyL)
Subject: Private mortgage
Date: Tue, 28 Feb 2017 08:23:00 GMT
Newsgroups: uk.legal,uk.finance
Organization: A noiseless patient Spider
X-Newsreader: Forte Free Agent 1.21/32.243



Use one or forever be screwed.

According to the Law Society, as at 31st July 2011, there were 159,524
solicitors on the Roll; which means that since 1981 the total number of
solicitors holding practicing certificates had grown by 206.4% at an
average annual rate of 3.8%. There are two major legal professions in
the UK =E2=80=93 barristers and solicitors.


And of the small, but several, solicitors, I've had contact with more
than a minor percentage have been pretty useless which is why I'm
asking here for thoughts first. When I subsequently talk to one at
least I'll have an idea of whether I'm talking to someone who knows
what they are talking about.

Thanks anyway.

--
AnthonyL

burfordTjustice[_2_] March 1st 17 11:44 AM

Private mortgage
 
On Wed, 01 Mar 2017 12:30:09 GMT
lid (AnthonyL) wrote:

On Tue, 28 Feb 2017 09:07:30 -0500, burfordTjustice
wrote:

On Tue, 28 Feb 2017 08:23:00 GMT
(AnthonyL) wrote:

From:
lid (AnthonyL)
Subject: Private mortgage
Date: Tue, 28 Feb 2017 08:23:00 GMT
Newsgroups: uk.legal,uk.finance
Organization: A noiseless patient Spider
X-Newsreader: Forte Free Agent 1.21/32.243



Use one or forever be screwed.

According to the Law Society, as at 31st July 2011, there were
159,524 solicitors on the Roll; which means that since 1981 the
total number of solicitors holding practicing certificates had grown
by 206.4% at an average annual rate of 3.8%. There are two major
legal professions in the UK =E2=80=93 barristers and solicitors.


And of the small, but several, solicitors, I've had contact with more
than a minor percentage have been pretty useless which is why I'm
asking here for thoughts first. When I subsequently talk to one at
least I'll have an idea of whether I'm talking to someone who knows
what they are talking about.

Thanks anyway.


Your peril no peril for those that give you answers.


AnthonyL March 2nd 17 11:20 AM

Private mortgage
 
On Wed, 1 Mar 2017 07:44:50 -0500, burfordTjustice
wrote:

On Wed, 01 Mar 2017 12:30:09 GMT
(AnthonyL) wrote:

On Tue, 28 Feb 2017 09:07:30 -0500, burfordTjustice
wrote:

On Tue, 28 Feb 2017 08:23:00 GMT
(AnthonyL) wrote:

From: lid (AnthonyL)
Subject: Private mortgage
Date: Tue, 28 Feb 2017 08:23:00 GMT
Newsgroups: uk.legal,uk.finance
Organization: A noiseless patient Spider
X-Newsreader: Forte Free Agent 1.21/32.243


Use one or forever be screwed.

According to the Law Society, as at 31st July 2011, there were
159,524 solicitors on the Roll; which means that since 1981 the
total number of solicitors holding practicing certificates had grown
by 206.4% at an average annual rate of 3.8%. There are two major
legal professions in the UK =E2=80=93 barristers and solicitors.


And of the small, but several, solicitors, I've had contact with more
than a minor percentage have been pretty useless which is why I'm
asking here for thoughts first. When I subsequently talk to one at
least I'll have an idea of whether I'm talking to someone who knows
what they are talking about.

Thanks anyway.


Your peril no peril for those that give you answers.


What peril ffs? I originally stated I would get things sorted
professionally. You're not a solicitor as well are you?

--
AnthonyL

Robin March 2nd 17 11:49 AM

Private mortgage
 
On 28/02/2017 08:23, AnthonyL wrote:
I've moved house and haven't yet sold the previous one, which is owned
outright.

Over the winter my nephew has been living there and now is interested
in buying it but would struggle to get a traditional mortgage due to
th nature of his work.

From my point of view I need some capital and some income to
supplement my pension. With this in mind I wonder what happens if I
go along the lines of saying that payments he makes over a certain
level will go towards his equity in the property. So if he puts a
lump sum of 20k in then he's bought a 10% share for instance. We can
agree a base interest rate and anything paid above that goes towards
equity.

Just looking for some thoughts and ideas before we agree a plan which
most likely will need professional involvement as clearly there will
be tax and other implications.


Like some others I think you should think hard about the "failure modes".

In particular "I need some capital and some income" does not sit happily
with "would struggle to get a traditional mortgage". Can you cope with
him failing to make payments - better than with, say, a commercial
letting? And would the family connection mean repossession was a
realistic option if he failed to make payments?

If you can accept the risks then one of the options you have in mind
looks to be very much like a bog-standard shared ownership scheme of the
sort used by housing associations, but with a mortgage from you.


--
Robin
reply-to address is (intended to be) valid

AnthonyL March 3rd 17 12:13 PM

Private mortgage
 
On Thu, 2 Mar 2017 12:49:31 +0000, Robin wrote:

On 28/02/2017 08:23, AnthonyL wrote:
I've moved house and haven't yet sold the previous one, which is owned
outright.

Over the winter my nephew has been living there and now is interested
in buying it but would struggle to get a traditional mortgage due to
th nature of his work.

From my point of view I need some capital and some income to
supplement my pension. With this in mind I wonder what happens if I
go along the lines of saying that payments he makes over a certain
level will go towards his equity in the property. So if he puts a
lump sum of 20k in then he's bought a 10% share for instance. We can
agree a base interest rate and anything paid above that goes towards
equity.

Just looking for some thoughts and ideas before we agree a plan which
most likely will need professional involvement as clearly there will
be tax and other implications.


Like some others I think you should think hard about the "failure modes".

In particular "I need some capital and some income" does not sit happily
with "would struggle to get a traditional mortgage". Can you cope with
him failing to make payments - better than with, say, a commercial
letting?


For my own needs any sale/income proceeds are a bonus as I have enough
to live on from other sources. But if someone handed me a nice 6
figure lump sum I can think of things to do with it!

Commercial lettings by all accounts have their downsides but one
advantage I see in him buying equity (ie any payments beyond an agreed
threshhold) would cope better with the following scenario, wouldn't
it?

And would the family connection mean repossession was a
realistic option if he failed to make payments?


I see that as more of an issue if I was to sell him the house with me
as a creditor of some sort than if he were buying in and I retained a
(hopefully reducing) share.

If you can accept the risks then one of the options you have in mind
looks to be very much like a bog-standard shared ownership scheme of the
sort used by housing associations, but with a mortgage from you.


I'll look the housing association schemes up, thanks for that.

--
AnthonyL


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