Wisdom needed: House Swap/Equity raise
Discussion
Hoping someone has some words of wisdom on how to best proceed with this.
A developer has purchased the land around my partners parents house and have offered them a new build house on the housing estate as compensation for acquiring their house.
Their current house is pretty much dilapidated and worth maybe 100k, the new build would be 250k.
Here's where it gets a bit complicated.
The parents want my partners sister to live in this new build house and the parents would live in the sisters existing house. The parents plan to gift the new build house 50:50 to my partner and her sister.
The sisters house is worth about 120k and there is a 50k mortgage on the property.
I've said to my partner that this is pretty much a bad idea as she would only ever benefit from this by forcing her sister to sell the property or buy her out down the line. I can think of a ton of situations where this can get extremely tricky and complicated.
I was thinking it's best to try and come up with a workable solution that resolves this at this point in time, where everyone is treated equally and is happy with what they are getting.
I've suggested they could do something like this, although i'm not even sure if its possible?
1. Parents take the new build.
2. Parents legally exchange new build for Sisters mortgaged house (250 to 120k property, no cash changing hands).
3. Sister ports mortgage over to new build, at this point I would assume she has 200k in equity and 50k existing mortgage
4. Sister takes out an additional 65k mortgage against the new build property and pays off my partner. (250-120)/2=65k.. Sister now has a 115k mortgage against a 250k property.
5. Sister legally owns 100% of the new build, parents own the sisters own house, partner has had equal share of the new build as a lump sum
A developer has purchased the land around my partners parents house and have offered them a new build house on the housing estate as compensation for acquiring their house.
Their current house is pretty much dilapidated and worth maybe 100k, the new build would be 250k.
Here's where it gets a bit complicated.
The parents want my partners sister to live in this new build house and the parents would live in the sisters existing house. The parents plan to gift the new build house 50:50 to my partner and her sister.
The sisters house is worth about 120k and there is a 50k mortgage on the property.
I've said to my partner that this is pretty much a bad idea as she would only ever benefit from this by forcing her sister to sell the property or buy her out down the line. I can think of a ton of situations where this can get extremely tricky and complicated.
I was thinking it's best to try and come up with a workable solution that resolves this at this point in time, where everyone is treated equally and is happy with what they are getting.
I've suggested they could do something like this, although i'm not even sure if its possible?
1. Parents take the new build.
2. Parents legally exchange new build for Sisters mortgaged house (250 to 120k property, no cash changing hands).
3. Sister ports mortgage over to new build, at this point I would assume she has 200k in equity and 50k existing mortgage
4. Sister takes out an additional 65k mortgage against the new build property and pays off my partner. (250-120)/2=65k.. Sister now has a 115k mortgage against a 250k property.
5. Sister legally owns 100% of the new build, parents own the sisters own house, partner has had equal share of the new build as a lump sum
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