Advice on parental gift mortgage

iceman28

Hi,
I'm looking for some advice please. My mother is selling her house to us hopefully, it is worth £150,000, but she wants £110,000. That leaves £40,000 equity within the property. I will be getting a mortgage hopefully on my own, I earn £28,500 per year in a full time paid job, which I have held for 8 years. I also have a small business, which I make approx £4-5,000 per year from. I have approx £23,000 of debts though. What I would like to know is - could this all be worked out via a perental gift? So I would buy the property in affect for £133,000 - therefore paying all my debt off, and then be left with a mortgage of £133,000?

Many thanks

MONDYMAN_3

The only way around this that i can see is the house is valued at approx £150k . You would have to borrow that ammount pay your mother and then she would cash gift you the difference after the mortgage completion..

Hoewever....these are the catches...

1 . Im assuming you have a deposit %5 at least
2. Your debt is high...might not even get the mortgage
3. You can only cash gift and this is roughly £3600 per calender year and you can backdate 1 year ( so £7200 ) otherwise you have to pay tax on it if the person who gifts dies within 7 years ( someone step in if thats not %100 right please ) so your mum could give you the £40k difference but if she passes away within 7 years you would be taxed on it.

Technically your 1st step is a mortgage application 1st to see if you can get a mortgage certificate for £150k . If that comes back approved then its pick your mortgage time ( have a look at the boards ) and get your valuation...if that comes back at around £150k your in business..

Good luck ( try and browse inland revenue on details of that cash gift tho , im sure it's along those lines )

MONDYMAN_3

Here's a link i just found that's worth reading....

Damn wont let me post it as im " too " new to the forums... go to inland revenue on google and search cash gifts and browse the answers..you'll find it..