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Gift / deposit dilemma
theserpent
Posts: 6 Forumite
Hi all
I am looking to buy my parents house. Its valued at £90-95k.
Originally we decided i was going to take it at asking and she was going to give me 20k of the proceeds for the deposit.
On meeting with the mortgage advisor i discovered that unless i can physically have the 20k in my possesion BEFORE the deal takes place it will be classed as her 'gifting' me the 20k and i'd still have to come up with at least 10% on top which leaves me with a bit of a problem. Also i'd be getting worse rates with an LTV of 90% as the value of the house as far as the LTV is concerened would be 70k.
Would it be worth my parents remortgaging 20k or getting some sort of short term loan? They would get it all back within a few months.
My first thoughts were remortgage with HSBC on a sub 3% lifetime tracker with unlimited overpayments and a £99 fee and repay it when the sale went through but am unsure of any implications.
Any advise is greatly appreciated
I am looking to buy my parents house. Its valued at £90-95k.
Originally we decided i was going to take it at asking and she was going to give me 20k of the proceeds for the deposit.
On meeting with the mortgage advisor i discovered that unless i can physically have the 20k in my possesion BEFORE the deal takes place it will be classed as her 'gifting' me the 20k and i'd still have to come up with at least 10% on top which leaves me with a bit of a problem. Also i'd be getting worse rates with an LTV of 90% as the value of the house as far as the LTV is concerened would be 70k.
Would it be worth my parents remortgaging 20k or getting some sort of short term loan? They would get it all back within a few months.
My first thoughts were remortgage with HSBC on a sub 3% lifetime tracker with unlimited overpayments and a £99 fee and repay it when the sale went through but am unsure of any implications.
Any advise is greatly appreciated
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Comments
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You need a better broker. Some lenders will allow a gifted deposit from relatives, so no need to jump through these time consuming and costly loops.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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You need a better broker.
no need to jump through these time consuming and costly loops.
My thoughts exactly!I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, 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.0 -
Yup, plenty of lenders who are happy in principal with family gifted deposit in form of 'below value sale' (provided valuation achieved at full value) - there are a couple of potential issues around conveyancing/stamp duty/subsequent tax issues etc but nothing insurmountable.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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That was a HSBC advisor, I have just given l&c a call and am expecting a call back soon
Thanks all0 -
Ok, slightly different over here (Guernsey) but our mortgage is with the Co-op and as my parents were selling their house and putting in money to our house - it was in effect the same thing as what you want.
All we had to do was provide a letter from my parents stating that this was going to happen and then also, let all the solicitors know what to pay where etc as it was completing on the same day.
We had no problem, saying that, we did have money to put in ourselves to cover fees etc
Do you have any money to put into it? How are you going to pay for fees etd0 -
HSBC are not providing you an adviser - just a sales person who will tell you what their basic rules areHi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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