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Buying in-laws' house - advice

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  • Buying in-laws' house - advice

    My wife gave birth to twins three months ago and we very quickly ran out of space in our home so we decided it was time to find somewhere larger. We have just accepted an offer on our property within a week of putting it on the market (sorry - not gloating - but might explain the thought process here!).

    Our plan is to move in with the in-laws in the short term and then either buy their house for a reduced price and for them to find another property, or we will buy somewhere subsequently. My father-in-law is retired and my mother-in-law works part-time - they own their house outright and would use the proceedings of a sale to us to buy the next place for 100% cash while we would get a mortgage to buy their current place.

    The problem we have is that my wife is on maternity leave and will only be going back to work part time at best. We would also have a high LTV (around 87%) and although our current lender is happy to give us the dough provided we get a letter from my wife's employers confirming there is a job for her to go back to we will unsurprisingly be paying through the nose on a high rate (6.49%) for a couple of years.

    Just wanted to get some opinions as to what we could do between us (my in-laws, my wife and I) to ensure we all do OK out of the situation. I'm sure there are pitfalls to buying from and selling to relatives but just wanted some fresh pairs of eyes on our predicament to see what we could do? Any thoughts gratefully received!

  • #2
    Re: Buying in-laws' house - advice

    Hello, unfortunately I can't offer any advice on buying/selling from relatives as I haven't been through that experience, but I did wonder if it might be worthwhile looking at a mortgage from another lender. The rate your current lender is offering seems very high, even if you do have a high HTV. Ours is 90% and we've just agreed 4.89% with HSBC. We are first time buyers, but the rate was open to anyone. However we are on two full-time wages currently, so perhaps that has something to do with it? Maybe worth looking around in any case. Good luck and congrats on your two new additions to the family by the way