private arrangement with mortgage

[Badtiming9]

HI,

What would the pitfalls of a relative buying my house - thus releasing the equity to me in order that I can pay off my debts and live relatively stress free. I keep up the maintenance, repairs, pay the mortgage and anything else for ten years. He pays the deposit - around £25,000. Then in ten years or so, sell up and split the profit. Is it unreasonable.?

I can't sell up because there is not enough equity to buy another house - but enough to live without pressure while developing my business again. We also have animals which we are both very attached too and putting them in a shelter is not an option.

Thanks

[disneysteve]

What would the pitfalls of a relative buying my house - thus releasing the equity to me in order that I can pay off my debts and live relatively stress free. I keep up the maintenance, repairs, pay the mortgage

If your relative is buying the house, why would you still be paying the mortgage? Or would you then be renting the house from the relative?

[Badtiming9]

If your relative is buying the house, why would you still be paying the mortgage? Or would you then be renting the house from the relative?

Yes but covering the mortgage payments for him. He would officially own the property. But our private arrangement would mean he pays me half of the profits after ten years.

I trust him implicitly although of course his own circumstances could change. Marriage, divorce etc. He would have to draw up a will maybe?

is it a terrible idea?

[disneysteve]

Well yes, I think it's a bad idea, but let's hear the details anyway.

He is going to buy the house. You will then rent it from him. Will your rent be higher, lower, or the same as what you currently pay?

Who will be responsible for taxes, insurance, maintenance, repairs, etc? If you will pay those costs, how will that factor in to who gets what when the property ultimately gets sold?

I think you are creating a huge mess for both of you.

[Badtiming9]

You could well be right. But to answer you:

the payments would be the same as I am paying out now as I have a loan secured on property. He would be in a position to obtain a more preferable mortgage rate. My credit rating is not so good.

He would pay the deposit. I would pay the mortgage/maintainance on the property for ten years in view of 50 50 split of profit at the end.

He gets a good ROI, I get to keep the roof over my head, clear my debts and at the end have 50% of something with is better than 100% if nothing. By which time I will rent.

But of course there are no guarantees. Except for loans secured on properties

[disneysteve]

How much do you owe on the house? How much will it sell for? How much other debt do you have? I'm trying to understand the reasoning behind selling your home to your relative and staying there.

Would it not be better for you to sell the house and go rent something cheaper?

[youshallliveinoverflow]

I really don't think its a good idea. Business is business and you must be careful. Be honest with yourself. You may need to sell the property and move on.