Gifted Deposit from fianc!

terakris

Quick question for you mortgage experts...

My fiance and I are hoping to purchase later this year. She will be stumping up half the deposit and I will match this, plus I will pay for all fees etc.

The thing is, I'm classed as a FTB but she isnt, so i wondered if it would be possible for me to get the mortgage in my name (affordabilty wouldnt be an issue for what we are looking at), but for her to gift her share of the despoit to me and still be allowed to live in the house with me. I didnt know if there were any rules as such to say the person giving any deposit money, cant live in the house or something.

Its only to really take advantage of the no stamp duty to pay for FTB, and at the end of the day its likely the amount would only be £1700 or so, but you know what its like... money saving and all... if i can get away with not paying it then i'd be stupid not to investigate it (that could pay for a new floor or something)

Anyone know if this sounds like it would be a problem? If it is, then we will simply do a joint application and pay the stamp duty.

Cheers

CLAPTON

how does she feel about you owning 100% of the house and her owning 0%?

tattycath

If further down the line things should go awry and you split up-surely she would have no proof whatsoever that she had a share in the property-I know you're all loved up the moment but you have to do some forward thinking-would you be happy 'gifting' her the money and possibly waving it goodbye. IMHO it's a bad idea.

terakris

She is fine about it, so thats not the issue, its more if it will be a problem with the mortgage company. im not fussed either way... the govenment take enough money off me, so any chance to keep some from them is always a good thing

kingstreet

Do you need her income taken into account to get the mortgage you need? If you do, you're stuffed.

terakris

kingstreet wrote: »

Do you need her income taken into account to get the mortgage you need? If you do, you're stuffed.

Nope I can get enough just on my own, otherwise i wouldnt even consider this option.

DreamerV

Is it possible to do as you wish, then afterward transfer half the property to her name after a set time, or is that impossible?

kingstreet

DreamerV wrote: »

Is it possible to do as you wish, then afterward transfer half the property to her name after a set time, or is that impossible?

Transfers of equity do have stamp duty implications under certain circumstances, so I don't believe this is a viable option.

http://www.hmrc.gov.uk/sdlt/calculate/transfer-ownership.htm

kingstreet

terakris wrote: »

Nope I can get enough just on my own, otherwise i wouldnt even consider this option.

I can't see why you shouldn't be able to do this if you can take it on on your own. I would suggest you both take separate independent legal advice to best work out how your individual interests can best be protected.

spadoosh

I tohught for the gifted deposit the 'giver' has to have no vested interests in the property?!?!?!? But surely if she has the money in her bank account she could just siphon off to yours as a payment for services rendered or something along those lines. And i also believe in terms of mortgages FTB status is given to anyone who doesnt have a mortgage at the time of getting one so she would be classed as a FTB.. no?!? So the only implications for the FTB would be stamp duty and if your not exceeding this anyway then you should have no problems!

terakris

Thanks for the responses.

I was hoping that from an application point of view it would be a viable option, however i myself had some concerns over her having no stake in the property herself but she seemed to be ok with this when we were looking at the total charges/fees involved. I think as we will be hopefully going for a fee-free mortgage, i may still get a joint application just for her peace of mind but it was something i wanted to have cleared up about the deposit from her being gifted and then her living there.

Also would it actually be a problem on the mortgage application if we did say she DOES have a 5% stake in the house, would the mortgage company then shy away from this as it would be 3 parties involved in the financials of the house but only 1 on the mortgage and i guess another "independant" party? Isnt this what those funny "paid deposit" schemes are on some overpriced newbuilds?

On a slightly (un)related note, wouldnt she have a 50% stake in the house once we got married regardless of who was on the mortgage, so if we did split up she would be entitled to half of what i have and visa-versa?

kingstreet wrote: »

Transfers of equity do have stamp duty implications under certain circumstances, so I don't believe this is a viable option.

http://www.hmrc.gov.uk/sdlt/calculate/transfer-ownership.htm

Interesting link btw - as i wondered if i could do that at a later stage. Seems either way the tax man will get his share so might as well just pay it up front lol!