1st Time Buyers Mortgage Application - Deposit is a gift we don't yet have

kingstreet

How about approaching Marsden Building Society?

They give you a mortgage, your parents put the equivalent of the deposit into an account to which they have no access until your loan to value drops to a pre-set level?

http://www.themarsden.co.uk/mortgages/products/offset-mortgages/dso138-3-99-percent

Family Offset - Deposit Assist Mortgage
To provide savings as additional security without giving the funds away altogether. Your savings support a higher level of borrowing and at the same time help to reduce the amount of interest charged. Access to your savings is restricted whilst the charge remains in place.

poppy_f1

i had a gifted deposit from my mum and the money never went anywhere near my account, i had to supply a letter stating it was a gift and the funds were transferred from my mums account direct to the solicitor

marvell-kid

In my opinion I would see the gift from Ms_Scarlett's parents to pay the deposit is in fact a genuine gift. But Ms_Scarlett will be gifting money back to her parents in the future.

A simple example would be every year I send my brother a birthday card with £20 in it to buy himself a present, and every year he sends me a birthday card with £20 in it. Is my gift technically a loan because he is paying it back to me or is it a gift acknowledged with another gift?

Sorry for the rant.

saverbuyer

marvell-kid wrote: »

In my opinion I would see the gift from Ms_Scarlett's parents to pay the deposit is in fact a genuine gift. But Ms_Scarlett will be gifting money back to her parents in the future.

A simple example would be every year I send my brother a birthday card with £20 in it to buy himself a present, and every year he sends me a birthday card with £20 in it. Is my gift technically a loan because he is paying it back to me or is it a gift acknowledged with another gift?

Sorry for the rant.

No it's a gift.

Say you say but I want the £20 back if times get tight like the OPs parents have. Well considering they will be getting older (and I'm assuming losing income in retirement) then it's reasonable to assume they will want some/all the money back at some stage. This would be a loan.

donkey1969

saverbuyer wrote: »

Yes it’s always helpful when someone else tells us it’s ok to lie. I mean it’s only a small lie. Is your deposit of several thousand pounds a gift or a loan?

I often wonder the extremes people go to just to buy a house. Fraud seems very common.

Did I say anywhere it was ok to lie? No I didn't, I merely stated what had happened in my case ( which was a genuine gift, my parents work on the principle they would rather help their children out whilst they are alive and can see the difference it makes to their lives rather than leave it to them when they die ).
If my parents ever had financial problems down the line, of course myself and my siblings would want to help them out in any way we could, but I would not class that as a repayment of a gifted deposit, it would be looking after family members.

RedFraggle

In the last 10 years I have always had to show proof of deposit for a house purchase, prior to that I never did.
We recently remortgaged and some of the additional money we paid off was coming from my husband but the house is only in my name. In order to do this the mortgage company requested a letter from my husband stating that this was an outright gift and did not give him any vested interest in the property.
There are also tax implications associated with gifts of large sums of money so you should check this out. I rang the tax office and checked on this and betwenn spouses this was ok but there are limits for giving money to your children. There are differing rules depending on what the relationship is between the gifter and the receiver.

Ms_Scarlett_2

RedFraggle wrote: »

There are also tax implications associated with gifts of large sums of money so you should check this out. I rang the tax office and checked on this and betwenn spouses this was ok but there are limits for giving money to your children. There are differing rules depending on what the relationship is between the gifter and the receiver.

Thanks for this. My dad is currently looking into this with his accountant, but his accountant said he thought there may be a way around it if my Dad loans it to my Grandma who then gifts it to me, as grandparents are allowed to gift larger chunks to grandchildren than their direct descendants (apparently...).

This is all very new to all of us. When we started this we thought it was all OK as long as my Dad didn't die in the next seven years, but apparently that may not be quite correct. I guess we shall see!

jln_2

I think you should've just said it was a gift for the purpose of the forum and getting a straight answer

Ms_Scarlett_2

jln wrote: »

I think you should've just said it was a gift for the purpose of the forum and getting a straight answer

Ain't that the truth...

Funny thing is, it really IS a gift. All totally sorted now after a couple of long conversations with the parents this weekend. Dad said he didn't really know why I'd decided it wasn't a gift - it was more my pride insisting I'd pay it back eventually as the size of the gift makes me a little uncomfortable, rather than their insistence. I have no brothers and sisters, and as my Dad is fond of telling me, I'll get it all in the end anyway, and he'd rather be around to see me enjoy it.

I guess I feel quite uncomfortable telling people this as no one wants to hear "my parents are giving me thousands of pounds, haw haw haw, aren't I just brilliant", so for that reason I do play it down a bit. But this has been a valuable lesson - when it comes to the mortgage people, swallow your pride, suck it up, accept the generous gift. Better people think you're a spoilt brat than a fraudster!

Ms_Scarlett_2

RedFraggle wrote: »

In the last 10 years I have always had to show proof of deposit for a house purchase, prior to that I never did.
We recently remortgaged and some of the additional money we paid off was coming from my husband but the house is only in my name. In order to do this the mortgage company requested a letter from my husband stating that this was an outright gift and did not give him any vested interest in the property.
There are also tax implications associated with gifts of large sums of money so you should check this out. I rang the tax office and checked on this and betwenn spouses this was ok but there are limits for giving money to your children. There are differing rules depending on what the relationship is between the gifter and the receiver.

RedFraggle - did some research today and it seems I'm fine to receive this gift as long as they don't die in the next seven years. My parents may be late 50s, but they're very active and not remotely old, so I think we're probably sorted (accidents and sudden death notwithstanding).