Parents Property, Gift or Buy

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H0VIS
H0VIS Posts: 2 Newbie
in Mortgages & endowments
Hi

I would like to buy one of my parents properties, its been valued at 350k.

The problem is my credit rating is not great - "fair". I can put 50k down as deposit.

Would it be possible for my parent to gift me the property and for me to take out a mortgage straight away for 300k? I hear that most lenders will not do it for 6 months?

Would really appreciate any advice.

Kind Regards

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  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    H0VIS wrote: »
    The problem is my credit rating is not great - "fair".

    Without knowing the cause of your rating only being fair difficult to comment on the likelihood of your application being successful.

    Is a mortgage of £300k within the bounds of affordability. That's another question.

    Will your parents incur a tax liability in selling this property? As you suggest that they own more than one.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    What are you going to do with the £300k?
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
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    H0VIS wrote: »
    Hi

    I would like to buy one of my parents properties, its been valued at 350k.

    The problem is my credit rating is not great - "fair". I can put 50k down as deposit.

    Would it be possible for my parent to gift me the property and for me to take out a mortgage straight away for 300k? I hear that most lenders will not do it for 6 months?

    Would really appreciate any advice.

    Kind Regards

    Assuming you'd be giving them the £300k, how would this be different to just buying the property from them?
  • H0VIS
    H0VIS Posts: 2 Newbie
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    Hi

    Thanks for the reply

    I earn about 90k - after tax, so think my earning are ok to cover 300k.

    Not sure about my parents tax situation.

    The 300k would be going to them to buy the house.

    I assume I would get a mortgage (or a better deal) if I had the house gifted to me first, as it would be an asset - rather than just trying for a mortgage to buy it, before I own it. Mortgage vs Re-mortgage.
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
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    H0VIS wrote: »

    I assume I would get a mortgage (or a better deal) if I had the house gifted to me first, as it would be an asset - rather than just trying for a mortgage to buy it, before I own it. Mortgage vs Re-mortgage.

    Makes zero difference to the bank.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
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    It would be easier to arrange a mortgage with a £50k gifted deposit than for your parents to gift you the entire property and then trying to get a mortgage.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    Why do you have a poor credit rating when you earn£90k?
    Are your parents able to wait ? Could you fix your credit situation over say the next year and then buy Ina years time with the gifted £50k?
  • amnblog
    amnblog Posts: 12,444 Forumite
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    There is a massive difference between them gifting it to you and your buying it.

    What is the objective here?
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    you have a few issues to consider.

    CGT assessment for parents on disposal(gift or buy)
    SDLT with connected transactions with gift house and gift of cash or a buy
    IHT with a PET and a subsequent gift back.


    If they don't need the cash in a hurry they could become your lender.

    £90k should cover some decent monthly payments
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