Re-mortgage to buy a second home for son

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ah here! this is daft - we've agreed that banks offer home improvement loans, which is a loan secured on your home!
 
Lorraine76 said:
Hi all. I can't seem to find much information on line about this, but we are a couple in our early 40's. Mortgage paid off. Would like to buy another house to give to our son. My question is can we re-mortgage our primary home to fund this to avail of the lower interest rates.
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Brendan Burgess said:
What age is your son?

Do you have to do this now?

Has he an income in his own right?

Can you help him to buy his own house?

Brendan
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Why do you want to take on more debt for yourself and give your son a house? Unless there are exceptional circumstances, you are sending out the wrong message to him. He does not need to be independent and can always rely on the bank of mum and dad to pay for things. In the meantime, you have taken on more debt to pay for him home, money that can be used to fund for your own future and your own retirement. Help your son out financially, sure, but buying him a house by taking on the debt yourself is the wrong thing to do.

...and you can't release equity in your own home to purchase another property. Banks will allow equity release for extensions etc but you have to submit plans.


Steven
www.bluewaterfp.ie
 
Thirsty said:
so this from PTSB (as an example) is totally untrue then? And they will lend €100k without security?
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No. That's a mortgage top-up. Which is obviously secured.

If you even bothered to read the website, you'd understand you have to already have a mortgage with PTSB to avail of it. The OP has a mortgage free home.

It's all irrelevant in the context of the OPs query.
 
SBarrett said:
Why do you want to take on more debt for yourself and give your son a house? Unless there are exceptional circumstances, you are sending out the wrong message to him. He does not need to be independent and can always rely on the bank of mum and dad to pay for things. In the meantime, you have taken on more debt to pay for him home, money that can be used to fund for your own future and your own retirement. Help your son out financially, sure, but buying him a house by taking on the debt yourself is the wrong thing to do.

...and you can't release equity in your own home to purchase another property. Banks will allow equity release for extensions etc but you have to submit plans.


Steven
www.bluewaterfp.ie
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Thanks for that life lesson. Did i say i would be handing over the house straight away? I have three children, two houses already, and intend to obtain another for my third child. I want them all to have a home when I'm dead and gone if they need it, this would not hinder them purchasing their own home like I did. Something my parents couldn't dream of doing for their family. My kids all have part time jobs and are still in school, work for their pocket money and know the value of looking after the pennies. I would rather leave them something of value than to see them struggling to obtain a home for themselves, nobody know what is ahead of them. And my pension is very healthy thank you! My question was a simple one and it has already been answered so I don't understand why you felt the need to confirm that.
 
Brendan Burgess said:
What age is your son?

Do you have to do this now?

Has he an income in his own right?

Can you help him to buy his own house?

Brendan
Click to expand...
Hi Brendan,
I probably worded my question wrong. I should have perhaps said that we wish to purchase a house to eventually give to our son, as our children are still quite young. We would probably rent it out long term first. Obviously we would like the best rate. With BTL rates so high, I hoped we could remortgage on our primary residence like you could do years ago. But i guess i am wrong in thinking any bank would do this now days. I will have to look into it in more detail.
 
@Lorraine76
Make sure to shop around on the BTL rates. With ICS their lowest rate is 3.75%, whereas a lot of the banks are >4.5%.
If you've an existing investment property, ICS might be open to cross securing both properties if you don't have the 30% deposit. A broker would advise you on what's possible.
 
Lorraine76 said:
Thanks for that life lesson. Did i say i would be handing over the house straight away? I have three children, two houses already, and intend to obtain another for my third child. I want them all to have a home when I'm dead and gone if they need it, this would not hinder them purchasing their own home like I did. Something my parents couldn't dream of doing for their family. My kids all have part time jobs and are still in school, work for their pocket money and know the value of looking after the pennies. I would rather leave them something of value than to see them struggling to obtain a home for themselves, nobody know what is ahead of them. And my pension is very healthy thank you! My question was a simple one and it has already been answered so I don't understand why you felt the need to confirm that.
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You said you would like to buy a house to give to your son. Giving it to him straight away is irrelevant.

Most parents can't afford to buy a house for each of their three children, it is not the done thing. If you want to do it for your children, fire ahead but my point stands. Another issue I raise with clients who want to do this, is what if your child doesn't want to live in that property? They may want to live elsewhere or meet a girl/ boy and want to live closer to them.

There is lots of research about kids, independence and letting them out in the world themselves. You are obviously trying to help your children financially but it also helps them to have to work hard and save for big things themselves.

On the lending, banks won't allow people release equity on their home in order to avoid paying a higher rate on a BTL.

Steven
www.bluewaterfp.ie
 
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