I don't know what to do for stepson

[Doone22]

I really don't know what to do - my stepson is mid thirties, married, living in London, working as a contractor on a very good day rate but he's had issues with his credit score and a year ago put down his inheritance from his grandad (£50k) on a new build. The property is now built and he needs to complete next month (£108k) but he's been rejected for mortgage and as I understand has tried a few different brokers.

He's been told that a family member could do it instead but I have literally just remortgaged and can't afford another one on top of my recently doubled monthly payment, nor do i want to put my house at risk.

I suggested I take my pension pot (only £40k) if he could find the rest elsewhere by getting some off all other family members and a small loan, etc
His dad is dead, his mum is a hippy living abroad somewhere but he has aunties and cousins I think but I just feel I need to help him out here with a short term loan. But on the other hand its his mistake, he's a grown man, he's young, fit, hardworking, healthy and earning ok so should I even make that offer?

Also on the table is we are both trustees for my son (17) and the money in his trust fund would cover it but I'm not even sure its legal to invest in this for a year yet alone possible..

WWYD?

The solicitor would not allow him to exchange without a mortgage offer being in place.
as a trustee you should not use your son’s money, you would be in breach of your duties as trustee.
Find out the truth.

Has he tried specialist mortgage brokers that help people with non perfect credit records?

does he loose the £50k if he doesn’t complete?

New builds often loose value initially, seems very risky to assume that he’ll sell straight away and make a profit.

This does not seem like a good idea OP. The housing market is shot to pieces atm. There's no certainty about making on this build. There's no way of accessing the pension without impact on your actual pension. This is just all a bad idea. Sorry

I'm glad you posted this @GrumblingGeek . I was thinking the same, but feared I was being a cynical old bat!

I've never heard of a holding deposit on a new build being anything like the amount he says he's paid.

Agree, there is no reason to give the developer more than the reservation deposit until the rest is due. Why let them get the interest?

please don’t give him your pension.

Don't ever get involved with family financially. There is a reason he has been declined and frankly, this story sounds like how a standard scam starts.. sorry but I would steer clear.

Still the hardest NO I’ve ever said on here.
HE CANNOT INVEST MONEY HE DOESNT HAVE! If he thinks he can/this is right to do, no wonder he’s clueless with money!
you need to get wake up OP.
he isn’t even going to make a profit on a new build.
Delusional.

thats unfair when you don't know him - its an off-plan purchase - whatever that means
I'm still inclined to say no - might limit my help to finding a broker or clearing his credit card perhaps but I really wanted some new ideas and confirmation that I can't do more than I am now

Don’t do anything more than helping him find a broker etc. no money.

There is definitely more to this than he’s telling you. There are some lenders out there who will lend to pretty much anyone just with a much higher interest rate.

As others have said, you need a MIP to proceed with a new build (although we had one that was then declined at full app which was only a week or so later).

He needs to see a specialist adverse debt broker.

You do also realise that it takes a while to make money on new builds as they usually drop in value first due to losing the new appeal. Flats can also a nightmare to sell. This has disaster written all over it.

Do not lend him money towards this especially as you don’t seem to have full details of the credit issue or why he can’t get a mortgage.

Thanks all for your comments - you are just confirming that I am sticking to the correct course of action by just helping him with brokers, maybe clear his credit card for him (6k)??. I think myself that he has probably been scammed - the type of person who is always looking to make a fast buck is easy prey.
But coming from a strong family with close ties its hard to see someone suffer. I wouldn't want my son without help if he needed it after I was dead.
For those that suspect him of trying to scam me- well you are wrong. He has borrowed money from me before but always paid it back. He's hard working (wish his wife was), kind, and a good brother to my lad. Just wish he had better sense! I did tell him though - he's young, fit, healthy, with good prospects and although it sounds like a lot he could actually make that back quicker than he thinks.

Don’t clear the credit card either!!

He's not going to develop better sense if you bail him out though is he?

Why has he got 6k on a credit card when he earns well? Why is he choosing to live beyond his means? Why do you think throwing money at him will help?

Also on the table is we are both trustees for my son (17) and the money in his trust fund would cover it but I'm not even sure its legal to invest in this for a year yet alone possible..

This is literally ‘going to prison’ territory. Do not do this. It is illegal (forget immoral - that goes without saying) and people can and do go to prison for diverting trust money in ways that disadvantage the beneficiary.

Also, if your stepson can’t convince a mortgage company he’s good for the money, chances are he won’t be able to repay your son.

Edited to say: Also, flats currently aren’t selling well and new builds drop in value - generally I’d say the buyer needs to hold on to a new build for at least 5 years to make back what they spent and for a flat, I suspect it will be longer.