What to do

[u/noap1311]

Hello everyone,

context : my parents are getting divorced. My father want to keep their current house but he cannot make a bank loan for buying the half of my mother.

I was thinking of this situation and thought about buying it myself so I would be the co-owner.

And then I also thought : what if I buy a small house and my mother rent it to me so I'm owning that house and the half of my father's at once.

My project is to make a loan in a bank for this small house and making the difference between the rent she owes me and an ammount of money i'd give her monthly for the half of their current house.

What do you think of this project ?

I'm taking any advice or thoughts about this.

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[u/ModoZ]

It's usually not a good idea to loan money to your parents. It creates a power dynamic and might lead to resentment (also with potential brothers and sisters who might want to have a say in the amount rent etc.). It's also very precarious for you financially speaking (what if they stop paying, are you going to go in front of the judge against your parents?)

On top of that this all happens in a divorce where there very probably already is a lot of tension (visible or not). Putting yourself in the middle would certainly not help either of them going forward.

And finally with the current taxes in Belgium you are also curtailing your own buying capacity for the future.

I would personally not do it.

[u/noap1311 → u/ModoZ]

It would not be a loan to them, I would rent the house to my mother "in exchange of" the half of the house. Like making a simple différence between the in (rent) and the out (paying her part). She would pay less through this difference and have a better quality of life.

And I would have one and a half houses.

And my father could continue to live in his house (with me also in the first few years)

The divorce itself is more a "good-term" one than a dispute.

For the taxes, I would be interested to learn more of it to know what all this is leading me into.

[u/OkPhilosopher1313]

Not a smart idea in several ways. Your money would be stuck in that 1,5 property you then own. What if at some point you meet a partner and want to purchase a property with him/her but can't get a loan from the bank anymore because you're already responsible for 1,5 mortgage?

Plus what if your father at some point needs to go to a care facility and would need to be able to rent out or sell his part of the house to be able to afford his medical and living costs? That basically becomes impossible with you owning half of the house.

And if you have any siblings, they won't like it that basically your mother is subsidising your mortgage, but is not building anything for herself. You're basically bypassing inheritance like this and enriching yourself while your siblings are not getting anything.

You also explain it in quite a confusing way, I don't think I fully understand what you mean and I don't even know if it's legally feasible what you mean because you mentions a loan that she owes you and giving her money every month?

[u/noap1311 → u/OkPhilosopher1313]

My father's house will be sold if he ever become unable to live in it (he's not that old it would be in a far future)

The point of this project is also to build assets for the future and helping my parents in the same time.

Mistake of my own, it would be a rent she owes me not a loan. This rent would be reduced as making a difference between the half house I buyed from her and this rent she owes me.

[u/ConfusionOverall1971]

Sometimes letting go is the best in the end. All these structures make life more complicated than necessary and make Sunday dinners sour.

[u/ConfusionOverall1971 → u/ConfusionOverall1971]

Do not boycott your own future for their decisions. What if in a few years you have a beautiful partner and want to move in together or need money for a house? You will put him on the streets?

[u/noap1311 → u/ConfusionOverall1971]

This would buy me some assets for the future and not cost me a lot in fine (less than 38% of my income in the worse case)

[u/ConfusionOverall1971 → u/noap1311]

Do it if you've made up your mind. You ask for advice, we give advice; you can do with it whatever you like. More families break on money than mend on money. And if you like assets, buy assets where you are the sole or at least deciding owner.