Buying parents house.

Q

Quey_Quick

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Hi guys

Please advise if this makes sense. My parents house is valued currently at 400 000 and they owe on it 100 000.

What would the implications be if I had to purchase the house and reinvest the balance as my deposit?

Legal and financial advice would be appreciated.
 
OK let me clarify.

> I get a bond for the full amount. (400 000)
> I assume once the bank deducts its money and the house is mine, my folks will then recieve roughly 300 000.
> Which i take and reinvest into the bond. Sorry didnt think 100% through re deposit.
 
there will be bank & transfer charges so you either need that money already or you'll get less to put back in...
 
Quey_Quick said:
average cost of the bank and transfer charges?
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That will depend on the bank(all defer) & value of the bond(as they calculate).

Also the interest will depend on the bank & your credit rating.

Call banks & ask for a pre-approval bond. They'll ask all the details they'll need.
 
So i guess its legal then? To purchase my parents house and use the cash to reinvest into the bond.

They will still be living in the house so its not like i am kicking them out.
 
Quey_Quick said:
OK let me clarify.

> I get a bond for the full amount. (400 000)
> I assume once the bank deducts its money and the house is mine, my folks will then recieve roughly 300 000.
> Which i take and reinvest into the bond. Sorry didnt think 100% through re deposit.
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No, thats a bad idea.

They should sell you the house for 100k and then make an agreement about the rest of the amount you will owe them.

The lower the cost of the loan the less the taxes and legal fees.

Not sure what you are trying to do though. Are you bailing them out or trying to transfer the property in to your name cheaply ?
 
Dad lost his job and unable to find work, mom a teacher so doesnt earn much, so yes bailing them out.

The property is my inheritance so i am not trying to get it cheaper. I would have gotten it regardless...
 
Quey_Quick said:
Dad lost his job and unable to find work, mom a teacher so doesnt earn much, so yes bailing them out.

The property is my inheritance so i am not trying to get it cheaper. I would have gotten it regardless...
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So then why not R250k? 100k to the bank and the rest to them?
Do they need the full retail value, if it was your inheritance anyway?
Bailing them out and giving yourself R300k worth of debt over 20 odd years is a bit tug of war IMO.

Not saying that what you're doing is a bad thing, its great. But if your Mom is still working and I take it she has a pension coming, they could take the +- R150k and invest that for a while and still do ok. (I'd imagine)

Anyway - do what you feel is best and take heed from the rest of the peeps here :)
 
Quey_Quick said:
Dad lost his job and unable to find work, mom a teacher so doesnt earn much, so yes bailing them out.

The property is my inheritance so i am not trying to get it cheaper. I would have gotten it regardless...
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Ye.. no point in inflating the price like that.

Go straight to a transfer attorney though, don't involve an estate agent, will keep the costs minimal.

Transferring the 300k will actually cost you more.
 
Shake&Bake said:
So then why not R250k? 100k to the bank and the rest to them?
Do they need the full retail value, if it was your inheritance anyway?
Bailing them out and giving yourself R300k worth of debt over 20 odd years is a bit tug of war IMO.

Not saying that what you're doing is a bad thing, its great. But if your Mom is still working and I take it she has a pension coming, they could take the +- R150k and invest that for a while and still do ok. (I'd imagine)

Anyway - do what you feel is best and take heed from the rest of the peeps here :)
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Because the interest you will get from an investment is less then what the bank will charge on a loan.

Thats why I say take over the bond (100k) and give them any money they need. Even if you give them 300k over a few years
 
Nerfherder said:
Because the interest you will get from an investment is less then what the bank will charge on a loan.

Thats why I say take over the bond (100k) and give them any money they need. Even if you give them 300k over a few years
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Noted :)
 
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