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  • FIRST POST
    • H0VIS
    • By H0VIS 13th Oct 16, 4:48 PM
    • 2Posts
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    H0VIS
    Parents Property, Gift or Buy
    • #1
    • 13th Oct 16, 4:48 PM
    Parents Property, Gift or Buy 13th Oct 16 at 4:48 PM
    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
Page 1
    • Thrugelmir
    • By Thrugelmir 13th Oct 16, 4:59 PM
    • 51,336 Posts
    • 43,186 Thanks
    Thrugelmir
    • #2
    • 13th Oct 16, 4:59 PM
    • #2
    • 13th Oct 16, 4:59 PM
    The problem is my credit rating is not great - "fair".
    Originally posted by H0VIS
    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.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • getmore4less
    • By getmore4less 13th Oct 16, 5:01 PM
    • 26,313 Posts
    • 15,814 Thanks
    getmore4less
    • #3
    • 13th Oct 16, 5:01 PM
    • #3
    • 13th Oct 16, 5:01 PM
    What are you going to do with the £300k?
    • ViolaLass
    • By ViolaLass 13th Oct 16, 5:09 PM
    • 4,732 Posts
    • 6,491 Thanks
    ViolaLass
    • #4
    • 13th Oct 16, 5:09 PM
    • #4
    • 13th Oct 16, 5:09 PM
    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
    Originally posted by H0VIS
    Assuming you'd be giving them the £300k, how would this be different to just buying the property from them?
    • H0VIS
    • By H0VIS 13th Oct 16, 5:46 PM
    • 2 Posts
    • 0 Thanks
    H0VIS
    • #5
    • 13th Oct 16, 5:46 PM
    • #5
    • 13th Oct 16, 5:46 PM
    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
    • By ViolaLass 13th Oct 16, 6:03 PM
    • 4,732 Posts
    • 6,491 Thanks
    ViolaLass
    • #6
    • 13th Oct 16, 6:03 PM
    • #6
    • 13th Oct 16, 6:03 PM

    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.
    Originally posted by H0VIS
    Makes zero difference to the bank.
    • Pixie5740
    • By Pixie5740 13th Oct 16, 6:18 PM
    • 8,873 Posts
    • 11,889 Thanks
    Pixie5740
    • #7
    • 13th Oct 16, 6:18 PM
    • #7
    • 13th Oct 16, 6:18 PM
    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.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • AnotherJoe
    • By AnotherJoe 13th Oct 16, 7:47 PM
    • 4,211 Posts
    • 4,227 Thanks
    AnotherJoe
    • #8
    • 13th Oct 16, 7:47 PM
    • #8
    • 13th Oct 16, 7:47 PM
    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
    • By amnblog 13th Oct 16, 8:53 PM
    • 8,859 Posts
    • 3,374 Thanks
    amnblog
    • #9
    • 13th Oct 16, 8:53 PM
    • #9
    • 13th Oct 16, 8:53 PM
    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
    • By getmore4less 13th Oct 16, 9:50 PM
    • 26,313 Posts
    • 15,814 Thanks
    getmore4less
    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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