Can i get a CU Loan for a Granny Flat Renovation

B

Brian_R_79

Registered User
Messages
11
Hi

Has anyone had experience with getting a large CU loan of about 75K to build and convert a garage into a Granny Flat in their parents home?
I am looking to move back with my parents and convert their garage for them to leave in so I can take care of them. I have a house with mortgage which i plan to rent out to cover mortgage while I move back to my parents house. Would a CU approve a loan for building work carried out where it is not my own house?

Any Advice would be welcome!
 
Short answer is, Yes, but it will depend on quite a few things and if it's in your name. It would also be an expensive way to go about it.
 
Thanks for the quick response. The Loan would be in my name and my wife name. It does look like an expensive option but I can't see how to get a mortgage as my parents house is staying in their name. A loan of 75K with Monthly payments of €1,311 would be managable once my existing house is rented. Any other ideas on how to finance cheaper without selling my house?
 
Spry Finance offer lifetime loans to older people who have nor mortgage.

The rate would be less than a credit union but the default is that it is not paid off until their death.

It's probably cleaner if the loan is in your parents' name as well.
 
And in addition to using Spry Finance for the loan, there are very tax efficient ways to pay this loan.

Depending on your income and your parents income, it might make a lot of sense to use a deed of covenant

Deed of Covenant - Query re Mechanics

Hi, Is the following correct based on people’s experiences with Deeds of Covenant: - I covenant €1k a year to an OAP, so I complete the form, make sure we meet the criteria, etc - I pay the OAP €800 - I’m deemed to have deducted €200 from the payment, but I don’t actually do anything or pay...
www.askaboutmoney.com
 
Is there a reason you don't want to sell? Or could your parents move to yr house & sell theirs.

I see so many families fall out over these sorts of arrangements.

Don't forget you'll have to pay tax on rental income & all the usual hassle of being a landlord.
 
Thirsty said:
Is there a reason you don't want to sell? Or could your parents move to yr house & sell theirs.

I see so many families fall out over these sorts of arrangements.

Don't forget you'll have to pay tax on rental income & all the usual hassle of being a landlord.
Click to expand...
I thought of selling but I would see our house as an investment and potential source of Pension. We rented our house before as we moved abroad for a few years and I know all the taxes/troubles involved so I think I can budget for that correctly. It makes more sense to move to parents house and upgrade as it's bigger than ours and we could potentially be mortgage free in about 10 years if I can finance correctly and not fall into any tax issues.
 
Thanks for the advice on the Spry Finance and the Deed of Covenant. I will look this up and make some calls.
Just to clarify
  1. I should get my parents to get a Life Loan for the money we need for Granny Flat.
  2. We want to pay this loan back as the house would be my inheritance.
  3. I setup a Deed of Convenant, 1 with each parent, can my wife also to this so we could pay 10K per year back?
  4. Only taxes I would be concerned about then would be rental income
  5. Hope that all works out with leaving with parents!
 
NoRegretsCoyote said:
I meant it the other way round, sorry.

The arrangement is more straightforward if you are the sole heir.
Click to expand...
Thanks for confirming. I am starting to research. Any advice on who i should talk to regarding going over all this and confirming numbers? would and accountant or Money Advisor be best?
 
Brian_R_79 said:
I thought of selling but I would see our house as an investment and potential source of Pension. We rented our house before as we moved abroad for a few years and I know all the taxes/troubles involved so I think I can budget for that correctly. It makes more sense to move to parents house and upgrade as it's bigger than ours and we could potentially be mortgage free in about 10 years if I can finance correctly and not fall into any tax issues.
Click to expand...
I would sell the house if it was going to give a good cash injection after everything's paid off. Renting one off houses is not the way to go anymore, very few plusses for an owner today, lots of regulations and plenty of other trapdoors for you to fall through too. There's also the possible question of what happens if your parents ever need to move to a nursing home. With the house in their names a largish bill might ensue.
 
noproblem said:
I would sell the house if it was going to give a good cash injection after everything's paid off. Renting one off houses is not the way to go anymore, very few plusses for an owner today, lots of regulations and plenty of other trapdoors for you to fall through too. There's also the possible question of what happens if your parents ever need to move to a nursing home. With the house in their names a largish bill might ensue.
Click to expand...
Thanks for the advice. Yes, there are lots of potential issues ahead. At least now, I can look into everything in more detail and way up all the options. I have some calls planned to get more information and think about this properly.

Thanks for all you advice so far!
 
Hi
I am still exploring the options with Finance and making progress. I do have one more concern inheritance tax which i hope someone can answer for me. I would like to keep our existing house and rent it out.. at least in the short term to see how it goes. With renovating my parents house, we will be increasing the value of the house to €450,000. I will inherit the house and i think i will face paying a big inheritance tax bill at the end of this, even though i will continue living in my parents house. Any ideas how I could reduce this if I decide to keep my Rental Property?
 
If I were you I would contact a Solicitor and talk through what your options are. It might be well worth the money for that consultation.
They are dealing with these issues everyday.
Those Senior money loans are not something to be undertaken lightly, at all.
 
You must log in or register to reply here.
Back
Top