How shoudl i raise money to help my mum buy another property

[jim38curl]

Hi there, this could be long one... My mum has a flat which has been valued at around 140k. She wants to buy a bungalow which is in need of major work for 175,000. She has no mortgage at the moment but doesn't work so would be unable to borrow any money herself. My property is worth in the region of 230,000 and i owe 78,000 ish on this still. If i was to borrow another 50,000 on my property to give to my mum so she could afford the one she wants, what would i tell the bank. I thought if i was honest they would say no as i would then in effect be giving away 50k but if i say if it was for example for home improvement they may ask to see some evidence of this as 50k is a lot of money. any ideas pls. Got to move quite quickly on this as the property my mum is after has had a lot of interest already.

[Ethel]

Shouldn't be a problem at all - the bank knows that if you default, there is plenty of equity in the house so they can repossess. :)

Talk to your bank - they want your business.

[jim38curl]

thanks for that. Are you saying to be honest then or say it's for a loft conversion or something similar ?

[Oneeyedvic]

To be honest, most banks are not really interested in what you are going to spend the money on - all they (insert the word 'pretend' if you are cynical) care about is that you can afford the repayments on the extra amount you are borrowing.

[Ethel]

Be honest.

[Darkoss]

The bank will ask what the money is for however ultimately what they are interested in is your ability to repay and the security they have. They will want to carry out a valuation of your property before they release the funds to ensure that they have sufficient security and will want to know your income and outgoings.

If you do end up borrowing the money and lending it to your mum, ensure that you structure her new house purchase correctly - possibly consider some type of joint ownership. Most certainly talk to a solicitor to ensure that your mother's will accounts for the fact that you lent her this money - especially if there are other family members that could benefit from her estate if she dies without a will.