Offspring buying a property - best way?
Discussion
Afternoon folks - my boy at 22 has always been very definite on his goals and has achieved all thus far - the biggie is he wants to buy a house / flat..... he lives in central Reading so that's location of choice - one bed flats weighing in at a median of £250K but a push to £300 gets two bedrooms to allow for future expansion / a flatmate if needs be... so although painful it seems the better option...
Thanks to a combination of Grandad , me, and jnr all having saved hard he has a deposit of £80K, trouble being he earns £38K so is still going to need some help, either via me as joint applicant (at 52 that limits the term) - and the bank have today accepted this in principle on a repayment without issue - I can see the benefits of this he could - at an inital stretch afford solo and I am easily able to afford (if only needed for the first year or two or as back up) ... or as a guarantor - we have yet to investigate guarantor mortgages.....but thought I'd canvas the collective PH on the preferred ways of achieving the end goal ........
We need a solution that would allow for the let of a room, or let of the entire property should his work arrangements change, allows excess payments at minimum sum of £1k and has no early repayment penalty.
I know 22 is early to hit "go" but something he's committed to so I will totally support ....
Be grateful for some PH wisdom...
Thanks to a combination of Grandad , me, and jnr all having saved hard he has a deposit of £80K, trouble being he earns £38K so is still going to need some help, either via me as joint applicant (at 52 that limits the term) - and the bank have today accepted this in principle on a repayment without issue - I can see the benefits of this he could - at an inital stretch afford solo and I am easily able to afford (if only needed for the first year or two or as back up) ... or as a guarantor - we have yet to investigate guarantor mortgages.....but thought I'd canvas the collective PH on the preferred ways of achieving the end goal ........
We need a solution that would allow for the let of a room, or let of the entire property should his work arrangements change, allows excess payments at minimum sum of £1k and has no early repayment penalty.
I know 22 is early to hit "go" but something he's committed to so I will totally support ....
Be grateful for some PH wisdom...
£300k purchase price, minus deposit over a 15 year term (Ret) comes out at £1800-1900 odd per month (@ 3.00%, yes it could be lower).
£38k pa is £2.5k p/m.
Half of the mortgage would be over 1/3 of his take home, excluding CT, bills, etc.
You could probably adjust that dependent upon your planned Ret date.
Unless I’ve misread what terms have the bank accepted as I cannot see how that’ll pass affordability.
4.5 x £38 is £171k, plus your £80k is £251k.
Purchase price doesn’t match income, simple as that.
£38k pa is £2.5k p/m.
Half of the mortgage would be over 1/3 of his take home, excluding CT, bills, etc.
You could probably adjust that dependent upon your planned Ret date.
Unless I’ve misread what terms have the bank accepted as I cannot see how that’ll pass affordability.
4.5 x £38 is £171k, plus your £80k is £251k.
Purchase price doesn’t match income, simple as that.
Edited by Lord.Vader on Wednesday 12th May 13:19
Not sure 22 is early to hit go, but maybe his aspirations dont gel with his income 
Personally, I would avoid at all costs flash apartments, and look at houses in good, but not great areas. Less bars and flashy lifestyle, but he should be able to sell it later
Quick search shows actual houses at 185 and upwards. Am sure that's in a scumridden hole, but he's better placed to decide.
Personally, I would avoid at all costs flash apartments, and look at houses in good, but not great areas. Less bars and flashy lifestyle, but he should be able to sell it later Quick search shows actual houses at 185 and upwards. Am sure that's in a scumridden hole, but he's better placed to decide.
Tim-D said:
Afternoon folks - my boy at 22 has always been very definite on his goals and has achieved all thus far - the biggie is he wants to buy a house / flat..... he lives in central Reading so that's location of choice - one bed flats weighing in at a median of £250K but a push to £300 gets two bedrooms to allow for future expansion / a flatmate if needs be... so although painful it seems the better option...
Thanks to a combination of Grandad , me, and jnr all having saved hard he has a deposit of £80K, trouble being he earns £38K so is still going to need some help, either via me as joint applicant (at 52 that limits the term) - and the bank have today accepted this in principle on a repayment without issue - I can see the benefits of this he could - at an inital stretch afford solo and I am easily able to afford (if only needed for the first year or two or as back up) ... or as a guarantor - we have yet to investigate guarantor mortgages.....but thought I'd canvas the collective PH on the preferred ways of achieving the end goal ........
We need a solution that would allow for the let of a room, or let of the entire property should his work arrangements change, allows excess payments at minimum sum of £1k and has no early repayment penalty.
I know 22 is early to hit "go" but something he's committed to so I will totally support ....
Be grateful for some PH wisdom...
If you are going to be on the mortgage, you'll need to be on the deeds and if you already own property, you will incur the additional 3% stamp duty.Thanks to a combination of Grandad , me, and jnr all having saved hard he has a deposit of £80K, trouble being he earns £38K so is still going to need some help, either via me as joint applicant (at 52 that limits the term) - and the bank have today accepted this in principle on a repayment without issue - I can see the benefits of this he could - at an inital stretch afford solo and I am easily able to afford (if only needed for the first year or two or as back up) ... or as a guarantor - we have yet to investigate guarantor mortgages.....but thought I'd canvas the collective PH on the preferred ways of achieving the end goal ........
We need a solution that would allow for the let of a room, or let of the entire property should his work arrangements change, allows excess payments at minimum sum of £1k and has no early repayment penalty.
I know 22 is early to hit "go" but something he's committed to so I will totally support ....
Be grateful for some PH wisdom...
There are options for him to do this without you..............happy to chat if you want to drop me a mail!
Ta chaps - perhaps I didn't explain properly £300k budget - £80k deposit = £220K mortgage with both of us on it and a combined gross of c£88k it becomes very acheiveable albeit my age limits the term. I'm mortgage free with a decent level of disposable monthly income. He's my only sprog - couldn't afford to do this twice!
His future earning potential is excellent so my expectation is that I take the weight in the ealry years and he'll catch up later on, regardless I'd expect him to have a flatmate, It certainly isn't my intent , or his understanding - that this is Dad buying for him...I never have - and never will make it too easy for him - but a half respectable property in the South East does require bank of Dad help at least in the short / medium term
Yes there are cheaper options than we're pitching at but - we need facility to let a room, so ideally 2 "bathrooms", or an easy rent of the whole flat if his work dictates a relocation
The stamp duty hit is a bit of a kick in the nethers - thanks Sarnie - think I'll be in touch in a while ;-)
His future earning potential is excellent so my expectation is that I take the weight in the ealry years and he'll catch up later on, regardless I'd expect him to have a flatmate, It certainly isn't my intent , or his understanding - that this is Dad buying for him...I never have - and never will make it too easy for him - but a half respectable property in the South East does require bank of Dad help at least in the short / medium term
Yes there are cheaper options than we're pitching at but - we need facility to let a room, so ideally 2 "bathrooms", or an easy rent of the whole flat if his work dictates a relocation
The stamp duty hit is a bit of a kick in the nethers - thanks Sarnie - think I'll be in touch in a while ;-)
Edited by Tim-D on Wednesday 12th May 17:00
Tim-D said:
Ta chaps - perhaps I didn't explain properly £300k budget - £80k deposit = £220K mortgage with both of us on it and a combined gross of c£88k it becomes very acheiveable albeit my age limits the term. I'm mortgage free with a decent level of disposable monthly income. He's my only sprog - couldn't afford to do this twice!
His future earning potential is excellent so my expectation is that I take the weight in the ealry years and he'll catch up later on, regardless I'd expect him to have a flatmate, It certainly isn't my intent , or his understanding - that this is Dad buying for him...I never have - and never will make it too easy for him - but a half respectable property in the South East does require bank of Dad help at least in the short / medium term
Yes there are cheaper options than we're pitching at but - we need facility to let a room, so ideally 2 "bathrooms", or an easy rent of the whole flat if his work dictates a relocation
The stamp duty hit is a bit of a kick in the nethers - thanks Sarnie - think I'll be in touch in a while ;-)
There are ways for you to not pay the additional stamp duty in this instance......His future earning potential is excellent so my expectation is that I take the weight in the ealry years and he'll catch up later on, regardless I'd expect him to have a flatmate, It certainly isn't my intent , or his understanding - that this is Dad buying for him...I never have - and never will make it too easy for him - but a half respectable property in the South East does require bank of Dad help at least in the short / medium term
Yes there are cheaper options than we're pitching at but - we need facility to let a room, so ideally 2 "bathrooms", or an easy rent of the whole flat if his work dictates a relocation
The stamp duty hit is a bit of a kick in the nethers - thanks Sarnie - think I'll be in touch in a while ;-)
Edited by Tim-D on Wednesday 12th May 17:00
Sarnie said:
The FCA seem to think so...........
That'll be a "maybe, who knows, or cares" then........https://pension-life.com/the-fcas-many-failures-el...
Groat said:
That'll be a "maybe, who knows, or cares" then........
https://pension-life.com/the-fcas-many-failures-el...
There must be plenty of other places you can grind your axe with the FCA/RBS or whoever it may be currently.......https://pension-life.com/the-fcas-many-failures-el...
Edited by Sarnie on Wednesday 12th May 22:10
Lord.Vader said:
£300k purchase price, minus deposit over a 15 year term (Ret) comes out at £1800-1900 odd per month (@ 3.00%, yes it could be lower).
£38k pa is £2.5k p/m.
Half of the mortgage would be over 1/3 of his take home, excluding CT, bills, etc.
You could probably adjust that dependent upon your planned Ret date.
Unless I’ve misread what terms have the bank accepted as I cannot see how that’ll pass affordability.
4.5 x £38 is £171k, plus your £80k is £251k.
Purchase price doesn’t match income, simple as that.
Www.spareroom.co.uk.£38k pa is £2.5k p/m.
Half of the mortgage would be over 1/3 of his take home, excluding CT, bills, etc.
You could probably adjust that dependent upon your planned Ret date.
Unless I’ve misread what terms have the bank accepted as I cannot see how that’ll pass affordability.
4.5 x £38 is £171k, plus your £80k is £251k.
Purchase price doesn’t match income, simple as that.
Edited by Lord.Vader on Wednesday 12th May 13:19
What would a lodger expect to pay.
Between £450 and £700 It seems.
Why 15 years ? If the guarantor can show he is paying into a pension, it may be that longer is allowed.
Sten. said:
It's actually quite a depressing read. £38k is an extremely good salary for a 22 y/o and he has what would be considered to most an impossibly large deposit, yet affordability is still stretched on a suitable starter flat.
Too right. That's excellent money for that age. In fact I'd wager it's top 2% levels of earning. You should be (and probably are) very proud of him.Getting on the ladder is easier as a joint venture. He needs to hook up with someone that has prospects so can double up on his lending potential.
Housing market is f
king mental at the moment. He has my sympathies.Gassing Station | Finance | Top of Page | What's New | My Stuff