Investing children's inheritance in our family home.

[Youknownorhing]

My Mother left her house split four ways. Myself. 2 siblings and my two children. So 25% for each child and 25% slit equally between GC in trust. They can have when they are 27.

I am a single parent in a house worth £400k. Ex left me with the mortgage and skipped off abroad with OW. He is in Dubai where CM is unenforceable.

My mortgage went from £500 to £1400 in January. I had already put my inheritance into the house to reduce mortgage to £150,000.

The children's share is £167k.
It seems ridiculous that I pay this money for a loan when there is money in a discretionary trust of which I and my best friend are trustees. The money makes bugger all in interest. The sea single thing to do in my eyes is to pay off my mortgage with the children's money . (I would do it via a lawyer so that their percentage of ownership is clearly recognised and recorded at the land registry )

Kids are 11 & 13.

I currently struggle to pay for day to day life for us all now the mortgage has increased . Doing this would free up my salary and allow us to have a few treats and perhaps even a holiday this year - something not on the cards at the moment .

Other trustee is more than happy . Can anyone see any problems doing this ?

Obviously I will have to sell in 15 years or so. But until then it seems a much better way to invest their money which will benefit us all.

I'd say yes! BUT you need a robust plan. When to pay it back (ie sell the house), what interest they get from it too.
They'll have a better life and enjoy their childhood more and you can say add an interest rate of 10% for example and they'd come out with more money than if it was just sat there.
The only downside is that you won't be gaining more equity yourself on your home.
MASSIVE caveat here - only as long as your ex husband cannot get his hands on it by way of still being attached to your home or you financially - that would be a deal breaker

So what happens when you don't want to move when they are 27 and they have the guilt of evicting mum?

Why can't you extend the term to it's max to give a bit of breathing space? As another poster pointed out you can't have a good deal currently on that repayment with that monthly payment, or you have a relatively short term remaining. Does it go out until you are 67?

Your first port of call needs to be a mortgage broker; second port of call a financial advisor. I cannot wrap my head around your £1400 monthly payment for a mortgage of £150k. My remaining mortgage is £110k and my payment is £500pcm. I've just checked and even if I was on a new tracker mortgage on today's rates my payment would still only be £600pcm.

I'm not actually totally against you borrowing the inheritance but it would need to be short-term and you would need to have a definite plan mapped out of how you will free up their share (plus adding 2% for interest of similar) before they are 27 so that their inheritance isn't trapped in your house.

No stipulation from the trust . They were left a share of the house 'in trust' . We decided to sell the house - so at that time the Trust was an owner of GPS house. So why can't that just be transferred to my property. Where it will also be held 'in trust'.

For those of you saying it will cause bad feeling . Why is this . They cannot access it until age 27 and I will sell when eldest is 26. If I die before that - the whole place is theirs anyway.

I'm amazed you have just inherited 168k and still have a 1400 monthly mortgage repayment!!!! Can you switch to interest only? I would definitely NOT use the children's money. Its all very well saying blithely that you'll sell the house but what if you are ill/infirm/can't sell?!

We had a similar situation but have an offset mortgage so we invested part of the kids money then offset the rest against our mortgage while interest rates are so high.

Also, if the money is in trust and can be used for their benefit now, why isn't the trust paying for the extra curricular activities? You can do that.

You could also use the funds to pay for the kids to go on holiday from the trust, but you would have to pay for yourself.

A close friend of mine has a trust fund for her DD after the child's father died. The trust is currently paying for a tutor, grief counselling, football, gymnastics and an upcoming trip to the USA / one of the Disneys. Mum is paying for herself on that trip. All agreed with the two trustees and the solicitor.

That's just a ridiculous argument.

It just wouldn't happen. It's their money.

I wouldn't consider it personally and agree with those suggesting you review your finances, particularly your mortgage.

I volunteer with older people and I can promise you it isn't a ridiculous argument at all!

I'd do it. As long as you have a plan in place to sell the house or whatever, so that you have the money when the eldest is 27, I can't see a problem. Why should you struggle now when there is this money available. Not read full thread so apologies if I'm repeating but have you asked the kids what they think? How will they pay for Uni? Although, they wouldn't have had the money at 18 anyway. Have you made a will leaving the property to them in case the worst happened? And what if you meet someone else and marry them? There are legal ways around all these things to ensure the kids get their money back, you just need to cover all the bases. I'd definitely go it to make life easier for you all now and it's a good way to invest their money.

Don't do it. It's not your money.

!Also, if the money is in trust and can be used for their benefit now, why isn't the trust paying for the extra curricular activities? You can do that.*

You could also use the funds to pay for the kids to go on holiday from the trust,

Yes. It makes much more sense to use the trust money to pay for activities, school trips etc that you can't afford.

There are legal ways around all these things to ensure the kids get their money back, you just need to cover all the bases

So blithe!

No effing way. Are you insane! You gonna sell up when they want their share?

Crazy. Don’t touch the money.

Because the mortgage is with a lender for dodgy mortgages. Ex husband developed a coke habit and remortgaged the house multiple times . Forging my signature. Supplying my passport details and various other bits of ID. Hence why he is abroad.

There was over 300 on the mortgage by the time I kicked him out. I paid off with my share of inheritance but still left with hefty monthly amount but at least I was able to take that on on my own and get him off the mortgage without having to give him anything .

My mortgage went from £500 to £1400 in January. I had already put my inheritance into the house to reduce mortgage to £150,000.

For goodness sake, see a mortgage advisor and get yourself a fix. Presumably you let your original fixed rate end without doing so and are on standard variable over a very short period.

Both my DD's have mortgages of around £200k, have very recently remortgaged (since the interest rate rises) and are paying far less than you.

You surely don't need 18k a year for school trips and a holiday?

Honestly I wouldn't do it.

My mortgage is similar and not fixed and we are paying far less than 1400!

Hi op because you feel you have this solution you are looking that way at the money.

First I think you should pretend it's not there an do everything you can to find a better mortar rate.
It doesnt t add up or make sense.

How do you find the mortgage? Have you looked at calculators
Is any of your share left because I'd be tempted to just play around with the mortgage first and eve and pay early repayment charge.

You will get lots of no you can’t do it it’s not your money on here.

I would, if it’s beneficial for your children now and as you say the house will be theirs if anything happens to you. As long as it’s clear they own a share in the house then do it. Also make sure any future partners you have have no claim to the house.

Absolutely not. My mother did this to me, and I never saw the money again and I’m pushing 40. She remarried, the trust didn’t end up protecting my money she put into the house, and when she dies it will be fought out in the courts with my stepsons gaining from my inheritance. Her investment of my money into her home made distrust her intentions towards me in every way.

Keep it separate. It may seem simple now. But if your circumstances change it muddies the water and threatens your children’s money. Use the trust to pay for the extras ie dance lessons, educational travel for then (but pay for yourself if you go with them), but not food, housing, medical/dental care, all the basics that are your responsibilities as a parent.

Try to keep that money protected as much as possible as a nest egg for them to build their adulthood on. Buying property is only going to get harder and harder.

Well works around the mortgage, there are so many ways of tackling them. That is the priority it's dead money.

Curious if the house has ever been remortgaged ie to free up money to pay off debts?

Because this doesn't add up:

You say its now worth £400k
You say it's increased in value since you bought it
You say you've just paid off £168k of what was owed
You bought it and started paying the mortgage 10 years ago

Somewhere along the line the house mortgage was extended once...where has that money gone and what's to stop it happening again

As above use trust money for the extras.

Also get it somewhere with better interest rates.

*step brothers not step sons 😖