Help please - gift of deposit!

Flower567

Hi Guys

Am new to here but was wondering if anybody could give me some advice. About 3 years ago my partner and I wanted to buy the house that we currently live in. However, at that time we were unable to obtain a mortgage due to various factors such as my credit rating was poor at that time and my partner was self employed. However, since then my credit rating has improved and my partner has also been employed for the last 2 1/2 years. My Mum therefore bought the house which is solely in her name. However, we have paid the mortgage on the property for the last 3 years.

We bought the house for £120,000 and my Mum put down a £12,000 deposit (which she does not want back). We recently had the house valued at £140,000. The current mortgage is on an equity basis for £108,000. My partner and I have now decided that we want to put the house in our name however, we do not have enough money to put down as a deposit although my Mum has said that she is willing to the deposit that she has paid and any equity in the house over to us.


I was wondering therefore if it is possible for us to obtain a mortgage and transfer the equity/deposit that has already been paid to do - any advice would be greatfuly received! Thanks in advance.

Cannon_Fodder

Officially your Mum has not given you a deposit. She has bought herself a house. (Her second, assuming she lives somewhere else?)

She could try remortgaging, to release equity and hand you the cash, but it is debatable whether a lender would think any property is higher in value than it was 3 years ago.

London appears around 3 years on the nose, England and Wales further back...

[IMG]http://www1.landregistry.gov.uk/houseprices/housepriceindex/report/default.asp?g=1&gt=1&a=E&W-ALL&ac=Greater London&s=01 January 2005&e=01 May 2009&t=4[/IMG]
http://www1.landregistry.gov.uk/houseprices/housepriceindex/report/

Do this for your own area, as there are some pockets that have not been hit so badly...you might be lucky.

Did your mother notify her lender that you were "tenants"? The lender may well expect to get a "buy-to-let" mortgage rate, instead of a normal one.

Not sure of the legal position. Her insurance may be invalid.

She may also have to pay Capital Gains Tax on selling the "second" property, to you.

Think she and her lender need to talk, to clarify where things stand. Might be best to go for asking to be a joint owner, at least get your name on the deeds, for the time being.

The level of deposit and clean credit history, they expect for the best rates, may suggest staying with the existing mortgage. Your own may not be so affordable.

Whether the lender will permit that without BTL implications, only they can tell you.