Borrowing money for a deposit!

tomjonesrules

snowcat123, the notion of a 'gentleman's agreement' is a lovely one in principle - the lender does not need the money, and everyone is getting on well. What you need to consider is what happens when people fall out, or if the lender needs his money back urgently. At an extreme, what if the lender goes bankrupt and the Receiver starts asking you for the money? Is getting on the property ladder worth more than good family relations?

fadetogrey

snowcat123 wrote: »

It could be declared as a gift, but as it's a close family member a gentleman's agreement could be made to pay back the money over time.

but if some time in the future you were to fall out with this "close family member" you could in theory refuse to pay it back as it was a "gift".

DCFC79

RichGold wrote: »

£50,000 is quite an amount to be "short".


Have you considered looking at something more affordable?

Now thats a sensible idea, i wonder if the OP has thought about it.

Fiddlestick

snowcat123 wrote: »

Based on our current circumstances it'll take 6 years to save this amount of money - in the meantime I will have paid nearly £70k in rent!

Tough !!!!.

You aren't the only one in such circumstances.

kittybangbang

OP, have you considered asking the family member if they'd be interested in part-ownership of the property with you?

Then you could use the £25000 as your deposit, and all the legal paperwork could be drawn up showing the percentage that you own, and the percentage that the other family member owns.

Leon_W

Some lenders will consider a loan as a deposit but obviously the repayments are factored into the affordability calculation and will reduce the overall loan amount.

Some lenders will consider the deposit being protected by the giftor as a second charge on the property only repayable on sale.

Hope this helps.

jonsyt

Have you considered doing a vendor paying deposit , Basically the seller writes themselves a cheque for the deposit or something along those lines . That was what we did when we got our mortgage a few years back . I dont know exactly how it works or if it is still a possibility as we had an advisor do all our dealings but its worth checking on

Leon_W

No lenders accept a deposit from the vendor. They used to, but not now. Family gifts are fine though.

MessyMare

If they want a 25% deposit perhaps you could scale back your horizons a little? We could have had a £176,000 mortgage but the thought of owing that amount made us feel ill, we're not entirely happy at our £75k mortgage!