To give my mum €20k towards house deposit

[investwithmum]

I've name changed as I don't want this very obvious thread linked to my main name sorry!

Basically my mum stuck her head in the sand about finances/ pensions/ security most of her life. She is in her mid 50s and is considering buying a house. But with rent being stupid money she is struggling to save a deposit. It will wipe out my savings but I can give her about €20k towards it. Where she lives she can still get a very decent house for about €175k it will be small but perfect for her needs.

Anyway DH thinks if I do I need to get something in writing that I have 'invested' in the house. But I don't think I can, I know lenders in Ireland (where I am) often look for a letter to confirm that the money is a gift and the giver will not look for it back.

I am an only child so when it comes to it (all going as nature intends) I will inherit this house. If not DS will. My mum has said that is what she intends. There would nothing of course to stop her in years to come to write a will and amend that to leave the house to the birds but I really doubt she would.

My mum was left high and dry when my dad left. I know it's a bit crappy but I am thinking at least this would leave me somewhere if things don't work out with DH. We are together 15 years and I honestly don't see us ever breaking up.

But that 20k will come back to me, and until that point if something does happen with me and DH he wouldn't be able to touch it as the house will be 100% my mums.

AIBU - Do not give the money to your mum
YANBU - Give it to your mum

Your dm is only 55 so the money will be tied up for a long time.

She could meet another partner and leave the house to him.

She could need care and the money could be used for that.

She could sell the house or take out an equity loan.
there is no guarantee you would ever get your money back.

If you have no other savings you would be mad to give this to your dm. In fact I'd be surprised and disappointed if she accepted the money.

She's not good with finances and is struggling to save a deposit. That is not indicative of a high earner or someone who'll be able to clear a mortgage in 15 years.

If she used the 20k to buy a 175k house, and borrows over a term of 15 years, she's looking at monthly payments of approx £1,300 at current rates. There is no reason to think rates will go down anytime soon.

If you decide to lend it you can still do a Declaration of Trust type document setting out your interest - this sits behind the legal title. Yes a mortgage lender will want you to sign away all rights but they don't need to be told about the document.
When there's a dispute the courts don't hold the document signed for the lender of no interest as binding usually.

Say what now?! I don't understand what's proposed, but sounds unwise to rely on an agreement that is not above board and declared to lenders

it would be foolish. You’d be wiping out your savings with no guarantee of ever seeing that money again, in whatever form. What if you find yourself desperately needing it shortly after you give it to her? What would that mean for your children? What if the house is sold to pay for care, or she remarries?

there’s also the fact that unilaterally giving away your entire £20k worth of savings could very easily have a massive impact on your relationship if you aren’t in agreement.

it’s one thing to give someone you love £20k that you can easily afford to give and won’t miss, but this isn’t the situation you are in.

Your mum could enquire about renting a flat from an organisation which let's to over 50's. The rents are more affordable and the organisation will be responsible for the maintenance.

www.anchor.org.uk/our-properties/properties-for-rent

Jointly owned. Of course

You could easily lose it if your mum remarried or needed care or lost her job/had to retire earlier and ends up defaulting.

Would she even get a mortgage? She would need to be able to pay off c.£155k plus interest in around 15 years. Is that actually feasible?

If you do go ahead you should be able to own part of the property to the % your deposit represents against house value. That's the only way to protect your interests. But are you sure you won't need the 20k? What happens if you lose your job and need to claim benefits? You may be declined.

Your best option is to lend her the money with a charge on the house, that way you know you will get the money back.

How old is your child? I would consider using any/most/all of my savings for housing deposits for my DC. Infact they're who I save for (though some in the savings pot is for emergency reasons for DH and myself). For my parents/extended family no. To many variables (your mum gets a new partner and she leaves it to them, care fees, equity release, mortgage defaults and repossession at a loss)......
..

"Too many variables"

You need to invest in legal advice. As it's going to take all your savings it doesn't sound like a very good idea at all. Then the fact that your DH isn't in support is another argument against. But if you really wanted to you would need some protection. If you gave her the £20k you could lose it all. To care fees. Or it being repossessed if she didn't keep up mortgage payments.
This all assumes that your Mum has taken advice on a mortgage and can get one.

Wow - that's extremely generous of you.
As I was reading your post was thinking about joint ownership as many have suggested - but what if your DM becomes ill? Although you've protected your equity, you could be liable for the mortgage.
Has she looked at developments for the "elderly"? - Many operate for people over 55, a few 50+,
I did the research (I visited over 60 developments across Hertfordshire in a period of about two weeks to get a shortlist for my Dad) typically the prices are a lot lower than properties on the open market.
There were service charges, which concerned DF, but when I did a budget and compared to repairs and assistance with his own house, they weren't any more expensive. His health wasn't great by the time he moved in, having a house manager in attendance meant he was able to maintain his independence far longer than he would otherwise.

Best get legal advice about how to protect your interest - for £20k it's worth it,

Also, is the £20k your own savings pot that you're 'wiping out' - or do you have other joint savings as a couple?

Could you buy it and rent it to her?

We (mum and I) have only looked at mortgage calculators online. You have to enter wage/ age/ current loans etc. According to those she is approved in principal for €220,000 but she could hopefully get something for a lot less. We live no where near Dublin!

In Ireland the house can be taken to cover nursing homes if needed. If that happens well its still a good investment as she will be well cared for in her old age.

My "dad" took all their money, car I think even some furniture and walked out when I was a toddler never to be heard of again. She never had another boyfriend 😪 so yes while not impossible I think the chances of her having another husband is astonishingly small.

I was born/ grew up in SE England. She always had well paid jobs (so thankfully there is a pension sitting therr for her, I'm looking into her topping up her state pension by paying missing contributions). But she spent her money on keeping up with the jones stuff wise. And never got on the property ladder. We moved to ROI where all her family lives just after mu GCSEs.

It's not family money with DH, it's my money that I saved. We run separate finances, he is a farmer and ploughs all money into that. The farm/ house were pre meeting me so they are Just his. But I really don't see us ever breaking up. Also we are married so I think even if notnin my name they would be marital assets. Dc is 18 months old

If I bought it and she paid the mortgage I'd be liable for income tax. I think.

What if she gets married ?

However, it's a nice thing to do if you can afford to

That's your lifesavings! I think you should not do this it is not your responsibility. What if you got ill and could not work? What if your Mum needed social care to look after her, would they take money out if the house? That's what happens in the UK.

But if you do, consider being put on the deeds and get legal advice. In England (so different country but there may be similarities). If two people are on the deeds, the only effect on the mortgage is normally positive because two incomes. But it needs to be clear who pays what and how any equity is split.

With DH and I the deeds are put joint trust. As in, we both own 100% as the trust can not be split, and so social care can't get out the money to pay DH care whilst I am still alive if that makes sense. You might need an Irish version of that.

I think you need to assume that if you give this money to your DM that it's a gift and you will never get it back. Work on that basis. Does it change how you feel ?

You say your DM has a track record of spending money 'to keep up with the Jones' - is this still the case ? I'm just worried that you'll pass over the £20k, and either it will be frittered away before any house is bought or she'll buy but be unable to keep up with payments as she is accustomed to living a level of lifestyle and she'll loose the house and will be back where she is now.

As for topping up her pension - why isn't she doing this? If she has a good job she should be putting money into a pension or other savings product. If she isn't saving - she really is an untrustworthy bet for giving money to, either for the house or for the pension. Again - does this change how you feel about giving her the £20k?

I know it's not received wisdom, but it's not necessary to own your own house. Yes it convers some financial security, but along with the security comes additional costs - building maintenance doesn't come cheap. A new boiler can set you back £3-4000. Does your DM have the where with all to get her head around that if she's been accustomed to renting for so long.

How will you replace the £20k - are you working ? How much are you saving per month ? Because you need savings and a pension too

Re your own family set up - from what I know about farmers and their land, they rarely see the farm as a marital asset. A family one yes, marital no. Does your DH have a will and what does it say ? How does he propose to provide for you and your child if he dies prematurely for example, or even if he lives to a ripe old age ? If he has nothing in place, that £20k is all that would be keeping you from being homeless.

think very very carefully before giving away all your savings, especially when you have a young child

This. You both need to agree.

I'd find a way to have some sort of 'interest' in the house through the deeds. Or at least that my 'contribution' was protected in case of a sale or a change in her will. I don't know how it would be handled in ROI but here (US) you'd file a 'lien' against the property. A lien guarantees repayment and must be paid off before any proceeds of a sale is given out. And a lien 'travels' with the property, so that if it's willed away or she was to change the deeds the lien must either be repaid or updated to the current owners before any deeds can be changed.

I'd also find a way that DH cannot claim that my share of the house is 'community property' in the event of a divorce. When MiL changed the deeds to her home to include DH and BiL, both SiL and I had to sign 'quit claims' stating that we were giving up any interest in the house. This meant we couldn't claim it as community property as part of a divorce.

I know you think she'll never remarry/have a partner AND that you and DH will never divorce. But they say 'never say never' for a reason.

I know it's not the usual on here but DH and I keep our finances pretty separate. He transfers me what I ask for monthly/ for dc. He purchases a trailer last year for €18k he did discuss it with me but I didn't really give much input.

I have discussed at lenght giving this money to my mum for his advice. He thinks that since it will (very very likely) come back to me that I should. He just worried about protecting my "investment". There was some trouble with some of his aunts after his GPs died. But I'm an only child.

@DPotter my thoughts though would be if she is spending €1,250 p/month renting now what will it be when she is 70 council/ elderly assistant homes are practically non existent here.

If God forbid DH died he does not have a will (we do need to get them) all would go to me as his wife. If (hopefully never) we divorce I'd go live with my mum!

We are in a hugely fortune position due to dh inheritance. We have no mortgage so I save €500 p/Mt

Apologies for typos, currently snuggling sick/ grumpy dc

Very good point

Her best option is a flat for older people. Have a good luck for one to rent.

I would not lend this to my parent

I'm 50 and just nearly spat my wine out 😆 wouldn't want to live with old people, she's not 80.
Your mum needs to take some responsibility here, it's been a long time since your dad left and must have been hard . I wouldn't lend her everything, maybe compromise on £10k? With caveat that it's yours . Or shared ownership

Couldn't she come and stay with you? Assuming big house being a farm. Even a caravan on your land and spend 12 months saving. On rent alone she would save almost £20k, then it's come from her own saving but you've made it possible.