Deposit question.

germaki

Hi,

I wanted advice on a possible scenario that could happen. I'm in a position where I could recieve a large amount of money from a family member (£10-20k) which would help me and my fiance with our deposit.
Our plan is to get 20% deposit and my Fiance gets the mortgage in his name only.

What I wanted to know was if I were to transfer this money to him and when he applies for a mortgage will the mortgage company ask questions about this transfer?

I would obviously get a deed of trust drawn up should the worse happen and we split up (have had that conversation about what would happen) so my money would be protected.

Any help/advice is appreciated.

Malky

You want to give your fiance £10/£20K and take out a mortgage in his name only? Why?

germaki

It's just part of our long term plan really-to be able to have a mortgage for a small amount which would be easily affordable for my fiance with his wages alone which would allow us to use my income to continue saving and evenutally be able to have a family in a couple of years and possible save for a larger house.

The_Palmist

You can declare this money as a gifted deposit. Lenders will expect a letter from your relative stating that they are giving this money to you as a gift and then don't expect it back. Just a plain letter does the job in most cases.

Lender or your solicitor may even ask for the source i.e. bank statement of your relative showing this money. This is to comply with money laundering regulations and not to check affordability. So as long as your relative has paid tax on this money, there shouldn't be any complications.

germaki

The_Palmist wrote: »

You can declare this money as a gifted deposit. Lenders will expect a letter from your relative stating that they are giving this money to you as a gift and then don't expect it back. Just a plain letter does the job in most cases.

Lender or your solicitor may even ask for the source i.e. bank statement of your relative showing this money. This is to comply with money laundering regulations and not to check affordability. So as long as your relative has paid tax on this money, there shouldn't be any complications.

Thank you for your reply. How would this work if I plan to give the money to my fiance? Obviously I would have this money in my account which I would need to then transfer to my fiance so would I need to have a letter from who I recieve the money from and then another letter from me to my fiance? or would it just be easier for me to keep the money and use it as the deposit without being on the mortgage?