Bought house with parents, now they want their money back in one go.

[DreamlessSleep]

My mum and step dad suggested that they helped us buy a house 5 years ago when our landlord was selling the house we were in, but now they want all their money back in one go (70,000 I don't begrudge them for wanting it but think they could have gone about it in a different way) and obviously we don't have this. We tried remortgaging but they won't take their names off the mortgage therefore we cant as they are now deemed too old to be on our mortgage.

Are there any other options I have not thought of apart from from selling? (Which is the option it looks like we will have to go for at the moment.) We were naive when we bought it and in hindsight we should have stuck to renting.

[allmycats]

I would speak with a solicitor as to how you can remortgage, take your mum along , they want their money but are effectively stopping you from re-mortgaging by their action in refusing to take their names off the mortgage. How do they expect you to raise the money ? There must be a document that can be drawn up so that they an take their names off the mortgage and be covered thatthey will receive the re-motgage monies when they come through.

[pootlebug]

If they want all their money back, and therefore no further interest in the house....surely they need to take their names off deeds and mortgage?

[fuzzywuzzy]

Why are they refusing to take their names off the mortgage?

Surely they have no claim on the house once they get their money back, or do they want interest?

[DreamlessSleep]

I don't understand how they expect us to find the money in one go without letting us remortgage. Plus our house is now valued at £27,000 less than it was when we bought it so even selling it we would be walking away away with absolutely nothing and them not quite the full amount.

[DreamlessSleep]

I really don't know why they wont. We payed out tge fees and surveys and right at the last moment they pulled out. It seems like an impossible situation right now.

[fuzzywuzzy]

In that case I'd tell them to go whistle.

Tell them the condition for getting back their money is to remove their names from the mortgage and deeds.

[pootlebug]

However they expect you to find the money, having no financial interest in the house and still expecting names on deeds/mortgage isn't right.

In theory you should be getting it revalued and giving them their share....even if less than they put in. They bought an interest in the house, rather than lending money, from the sound of it. Would they be expecting a % of the 'profits' if it had gone up in value?

I would not want parents who had not put any money in (once taken out) having a legal interest in the house - the last thing you want is to have to pay a % of their care home fees should they ever need care, because on paper it is part of their assets.

[IrisWildthyme]

Did they make it clear that it was only a loan when this all happened 5 years ago?

Do they just want the same amount back that they put in (without interest) or do they effectively own a percentage share of your house?

Can you clarify what their name is actually on - if they are co-owners of the house, with their name on the deeds, that is different from being co-signatories on the mortgage - which would mean they are sharing responsibility for ensuring that the monthly repayments get made. Are they are contributing to or underwriting/guaranteeing your monthly payments or did they just give money towards the deposit?

If they want their lump sum back and do not want to share responsibility for the mortgage any more then your only () option is probably to sell. If you've been on a repayment mortgage and just have to give them back the same amount they put in, you will probably have £5-£10k of equity left after the sale goes through - possibly enough to go through a Help-to-Buy type scheme to buy without their assistance.

() this of course isn't actually your only option. If there isn't anything in writing saying that they can have their money back on demand, then you can refuse. This is one of the ways to create a massive family argument which could sour relationships for decades...

[DreamlessSleep]

Its like they think that if they take their names off we might sell it at a later date we might make some profit which they wont be entitled to. Truth be told if it werent for this we would never consider selling it.

[IrisWildthyme]

Edit - written before you said the house has gone down in value - eek! I think you need to get an appointment for a solicitor or CAB advice person to sit down with you all together and work out the options.

Are you saying that you had found a way that you could remortgage, pay off their share and take full responsibility for the house without their aid and they refused because they wanted to keep their names on the house despite having no financial input into it? That is bonkers and unreasonable of them.

[DreamlessSleep]

They are co-owner, all four of us (me dh, mum and step dad) are on the deeds but they dont make payments they paid the deposit. We were so naive we didn't ask when they wanted it all back as they said you can pay it back when you are in the position to. Unfortunately we didnt get this in writing or anything else written down which sounds incredibly stupid now I write it.

[IrisWildthyme]

Ah so they want their £70,000 back now, but ALSO want to have a share in the profits if they house has gone up in value by the time you DO sell?

Well that is just NOT how investments work. If they want their money back now, and they consider that they have a "share" in the house, then the money they get back now is reduced by their share in the loss the house has currently made.

If they want to maintain a hope that the house goes up in value again by the time it is sold and that they may have a share in that increase, their money needs to stay right where it is.

If they invested money anywhere else and asked to have their original investment back but also to keep their rights on any future share of profits in the thing they were investing in, they would be laughed at. It is a ridiculous notion, and what they are suggesting would be exploiting you in a very unreasonable way.

[DreamlessSleep]

Yes Iris, that's exactly what they want. Its crazy.

[magichamster]

I think you need to firstly talk to them about why they want their names on your mortgage. Do they realise that if you don't pay it they are responsible?

Secondly, I would take them to CAB/solicitors/mortgage brokers with you so a third party can explain to them that unless they take their names off the mortgage/deeds then they won't be able to have their money back.

I take it you have looked around and can get a mortgage on your own?

[IrisWildthyme]

Barking dingbats I'm afraid.
Is there a third-part who they trust who can help mediate here? e.g. do you have a nice sensible aunt or uncle who can explain patiently they if they want to sell you back their share of the house they have to transfer ownership of the thing they sell, they are not allowed to have both the money and the thing that the money is to be exchanged for. They have to choose.

[fuzzywuzzy]

You're going to have to be brazen about it and point blank refuse.

Their choice is, remove themselves from the deeds and the mortgage and get the deposit back (altho I'm beginning to prefer Pootle's suggestion and returning them the percentage in value your house is now worth).

If they refuse they don't get the money back.

[adagio]

^^
what iris said

They sound most unreasonable. If they want their money immediately/in one go (which in itself seems a little off as it is putting you in a very awkward position) then they lose all rights over the asset, and should lose a proportional amount to the drop in value since purchase.

[JassyRadlett]

Well, for starters they wouldn't be getting their £70k back, would they? It would be reduced by their share of the decrease in value.

It sounds like they went into this as an investment. You need to approach it as such.

On the bright side, you actually hold the cards here. You can't raise the money without remortgaging or selling. If you sell, they will need to take their share of the legal and estate agent fees as well as loss on value of house. If you remortgage, they won't have those costs (and you might be willing to give them the full £70K back as a gesture of goodwill and thanks for the help in the first place).

[HormonalHousewife]

Is there a reason why they want the money now ?

I think they are being completely unreasonable. £70K is a heck of a lot of money to find 'suddenly'

[DreamlessSleep]

Unfortunately no mediator, only my dsis and I cant get her involved as shes got problems of her own at the moment. I am going to have to be brazen with them definitely. I really dont know what is going on in their heads right now.

[DreamlessSleep]

Its obviously causing problems between us now, our family relationships will never be the same. It does feel like something has changed their minds but I dont know what.

[BlissfullyIgnorant]

Ouch! Sounds like something dodgy is afoot. I would follow the percentage recommendation lots of people posted up there ^
Also, get a free half hour consultation with a specialist lawyer AND get a good financial advisor in case you need a remortgage.
How do you get on with yr DM's DH?

[DreamlessSleep]

HormonalHousewife I think part of the reason is mum wants to give up her job. Shes not old, a 'young' 50. I dont understand how they thought I could magic up this sum though.

[HormonalHousewife]

Hmm that makes sense then but still unfair