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Original poster

My husband wants to...

70 replies

40andlovelife · 23/03/2025 09:44

We bought our house about 14 years ago for £165k and it is now valued at £300k. We owe about £150K on the house still as we remortgaged once.

My husband wants to take £30k out of the value of the house to use as a deposit to buy another house which he plans to rent to a family member. He will pay the excess cost that this puts on the mortgage every month,

Can anyone see any obvious disadvantages to me of this plan?

OP posts:
Gundogday · 23/03/2025 10:33

So you’ve only paid £15000 of your mortgage , and your husband wants to ‘borrow’ double this, to buy another house.

Firstly, will you be able to get a mortgage for the new house.

Whise idea was this to do? Was family member putting pressure on dh? Is family member in sound employment? What happens if he defaults?

Why did you remortgage initially?

LilyOfTheValleySoon · 23/03/2025 10:33

My gut feeling is that his project is going to be a nightmare very soon. From issues with said family member, needing to do repairs on that house (because he is the landlord) etc etc

Even if you detach from the running of it, you’ll still have to live with the atmosphere if stress on the house. And maybe finding more money again (from paying the mortgage because tenant hasn’t paid, repairs etc….).

I really think you need to be fully on board because whether or not you plan to be involved, you’ll still have will be Ime.

Gundogday · 23/03/2025 10:34

40andlovelife · 23/03/2025 09:55

Of course! Luckily it won't be my problem though. It's his family member

Show quote history

What if family member won’t move out?

LilyOfTheValleySoon · 23/03/2025 10:35

Also agree with @Gundogday
Why did he remortgage the first time? Wondering if he has any financial sense really.

Hoppinggreen · 23/03/2025 10:38

Being a Landlord is not easy money, even more so if family is involved
Worst case scenario you will be paying the mortgage while someone who lives there causes damage and then you have to pay thousands of pounds to evict them and repair the house. THEN he gets a big tax bill as well.
There are also a lot of legal responsibilites around being a Landlord

Gundogday · 23/03/2025 10:39

40andlovelife · 23/03/2025 10:30

Thank you for the replies. Very interesting about the BTL mortgages for family members. I reckon he has no idea about this and will tell him. Family member has lots of pensions and not entitled to housing benefits.

So retired?

Original poster
40andlovelife · 23/03/2025 10:39

LilyOfTheValleySoon · 23/03/2025 10:33

My gut feeling is that his project is going to be a nightmare very soon. From issues with said family member, needing to do repairs on that house (because he is the landlord) etc etc

Even if you detach from the running of it, you’ll still have to live with the atmosphere if stress on the house. And maybe finding more money again (from paying the mortgage because tenant hasn’t paid, repairs etc….).

I really think you need to be fully on board because whether or not you plan to be involved, you’ll still have will be Ime.

I think you're right.

I also think his main motivation is to support the family member, he's a very very very generous person and struggles to see others struggling. Family member currently rents and the uncertainty of being given notice is causing them stress.

I think he has convinced himself it will be beneficial financially for himself in the long run- having the new house as his pension. But I think his main objective is to support the family member.

OP posts:
Original poster
40andlovelife · 23/03/2025 10:40

LilyOfTheValleySoon · 23/03/2025 10:35

Also agree with @Gundogday
Why did he remortgage the first time? Wondering if he has any financial sense really.

House improvements. Before he became a higher earner

OP posts:
StMarie4me · 23/03/2025 10:41

confusedlots · 23/03/2025 09:58

Oh and if he ever sells the rental house in the future, he’ll pay capital gains tax too

On the profit. So there will still be profit.

Hoppinggreen · 23/03/2025 10:42

Both the increased mortgage payments and the property WILL be your problem.

HappydaysArehere · 23/03/2025 10:43

Red flag for me would be that taking money out of your house is never a good idea financially unless you are really old and a massive no no to involving a family member. Might sound easy on paper but ….,,.,,,,,

StMarie4me · 23/03/2025 10:44

DaphneduM · 23/03/2025 10:10

Both my husband and I have been landlords in the past. It's a lot of hassle for very little return by the time you've taken your costs out. Renting to family would also be a red flag to me. If they can't buy their own house, how reliable are they financially for paying the rent? (Or is the taxpayer paying it i.e. benefits?). I would steer clear myself. Your husband also may find out the hard way that he actually won't get any thanks from his relative for his largesse.

Another person demonising renters - insinuating they can’t afford a mortgage.

it’s the deposit they haven’t got, especially now that rents have risen so much.

The deposit. Get it? See?

Stop behaving as if all renters are financially irresponsible people. They just haven’t got £30/40/50k.

Original poster
40andlovelife · 23/03/2025 10:45

I was just thinking. If he went ahead and took the £30k and paying the excess on our mortgage cost- surely I am still losing out because they £30K equity would technically be half mine in the future? Or am I totally off the mark? Before anyone decides to be snarky and say I have no financial understanding , you're right I probably don't as I have focussed on other things during my life!

OP posts:
Hoppinggreen · 23/03/2025 10:48

40andlovelife · 23/03/2025 10:45

I was just thinking. If he went ahead and took the £30k and paying the excess on our mortgage cost- surely I am still losing out because they £30K equity would technically be half mine in the future? Or am I totally off the mark? Before anyone decides to be snarky and say I have no financial understanding , you're right I probably don't as I have focussed on other things during my life!

Well yes, your mortgage will go up and the equity in your house will go down.
And by you I mean you, not your H.
You WILL also part own the new house but that comes with tax implications for you as well

mummytrex · 23/03/2025 10:49

Another thing to consider is given it's a family member will your husband insist on a formal tenancy agreement if not and the family member failed to pay, it will not be straightforward to evict and / or get another renter in.

Original poster
40andlovelife · 23/03/2025 10:50

Thanks all. To be honest needs to stop inserting himself in to other people's problems and trying to solve other peoples issues .

OP posts:
legsekeven · 23/03/2025 10:53

The only way I would agree to this is if the rental home is in both of your names.
We did similar for my dhs parents years ago, although we used savings not equity. It was awkward at times as they were not very good at taking care of the house.

It worked out ok though

Tiswa · 23/03/2025 10:56

The fact that in 14 years you have only paid of 15k of the mortgage is shocking - what mortgage are you on because even with remortgaging for improvements that looks to be an interest only one.

I have never seen a heard a situation where so little is paid off unless it is interest only in which case not only are you losing equity you are further in debt

I think you need to learn fast what type of mortgage you have

Dysonairwrapisatthehotelmaybepossiblyprobably · 23/03/2025 10:57

If he takes out £30k, you both have less equity and your LTV will be different when your current mortgage fix runs out (assuming you have a fixed rate). What is offered to you may be more expensive as your LTV is different.
Also he’s taking 10% of value, I would want that to be recognised, either you own 10% more in your current home, or you own some percentage of equity in the rental property.

HellDorado · 23/03/2025 11:01

TwoUnderTwitTwoo · 23/03/2025 10:14

He will probably have difficulty finding a buy-to-let mortgage to rent to a family member. They are all unregulated, have strict conditions, often require a particularly high deposit (for the reasons outlined above) and tend to have a higher mortgage rate. If he tries to get an ordinary BTL mortgage and lies about his tenant being a relative then the bank has the right to demand immediate repayment of the mortgage or repossess. Has he outlined the detail of how this BTL for his family member will be financed? It is a marital asset, affects both of your credit scores, and defaulting on it could result in repossession of both the BTL and your marital home.

All of this. My sibling and I tried to do this a few years ago and the only provider we found that was willing to do it ended up withdrawing the offer soon afterwards as they decided to exit that niche market.

CautiousLurker01 · 23/03/2025 11:03

40andlovelife · 23/03/2025 10:03

You're right I do blase about the family issue. I am blase about it on here because it's not the issue I am focussing on. I am simply interested in whether on the face of it and all being well, the plan will affect me in terms of my own current mortgage.

Show quote history

As another PP has said - yes, it affects you because he will be taking out a deposit from your shared asset to invest (and thus, a share of the second house is legally yours) and you are liable for and/or covering the mortgage payments on the current house that will now have a larger mortgage. You are married, this is a joint asset he is withdrawing from and if he ends up with an unrentable property or with legal issues arising from tenants (faulty boiler, CO2 issues etc, fire due to inadequate alarms etc) you, too, will be liable. Also note that there are considerable additional expenses as a landlord, and even if you are to a ‘BTL for family’ you are still bound by all the BTL rules on the mortgage and have considerable landlord obligations, because having a family member as a tenant does not remove those legal requirements - as we discovered when exploring buying a flat for our children to live in at university.

You should both take proper legal advice to understand the implications for you as a couple and as individuals, as well as as landlords to both family and non family under the terms and conditions of a BTL mortgage.

SeriaMau · 23/03/2025 11:07

40andlovelife · 23/03/2025 09:55

Of course! Luckily it won't be my problem though. It's his family member

Show quote history

How would you do this? The simplest legal route could take 12 months, but as a previous poster said, ‘family’…

DaphneduM · 23/03/2025 11:08

@StMarie4me As the OP states that the person involved has very good pensions, that implies they have held down good jobs during their working life. Obviously had other priorities to saving for a deposit, which of course was much less in years gone by. People have different priorities in life - for many people, however, that is scraping together a deposit for their own home, even it is by means of getting second jobs, etc.

And I'm not demonising renters - my husband and I have both been landlords and have had some very good tenants. However we have also had some bad ones - been left with rental arrears and property damage. Of course there are good and bad, like in anything. However I still maintain, in OP's situation, I certainly wouldn't encourage her husband to go down this particular avenue. It pays to keep life as simple as possible in my opinion.

Lairymary · 23/03/2025 11:08

40andlovelife · 23/03/2025 09:55

Of course! Luckily it won't be my problem though. It's his family member

Show quote history

Exactly. It's his family member, that he's never going to evict because he's actually going to the lengths to buy an actual house for them to live in. Wise up, when push comes to shove, entitled family member will default because they can away with it and your husband won't do anything about it, leaving you to struggle with the finances and bad feelings.

ginasevern · 23/03/2025 11:09

@40andlovelife

"Of course! Luckily it won't be my problem though. It's his family member"

I'm afraid it will be very much your problem. It's incredibly (and rather frighteningly) naive of you to think otherwise.