Daughter Buying Me A House: Pitfalls? Advice?

WoodruffsDad

seven-day-weekend wrote: »

We gifted our son's deposit; the solicitor just needed to know it was in fact a gift and didn't need to be repaid.

(However, if he wins the Big One on the Premium Bonds......:rotfl:)

In the OP's case, how about - Bank of Mum and Dad give their daughter £20k. This lives in her bank for six months.

After six months, she then applies to buy a house as a BTL, using her own £20k as a deposit.

What's wrong with that?

I have been told by a financial adviser that as a first time buyer my daughter would NOT get a buy-to-let mortgage. Apparently it is impossible to get a b-t-l mortgage unless you already have a residential one.

seven-day-weekend

Fire_Fox wrote: »

It's already been explained that the problem lies with it being a gift with reservation, the OP expects their daughter to use it to purchase a BTL property and for the OP to be the tenant. How is six months going to change that? What you are proposing is covering tracks - lying by omission? - not changing the fact that it is not a no strings gift.

If there is no written evidence of the agreement for the OP to be the tenant they have no come back if the daughter kicks them out after the first six months and refuses to return the 'gift'. Yet the OP said they "need to be sure that we're safe in case of any future health problems as the years go by!"

But it could be in her bank account for six months, then it would be her money, surely, not loaned or given for a particualr purpose? (She could say no, after all).

To the OP, if she can't get a BTL mortgage, she will have to get a Consent-to-Let on a residential mortgage. She can't just rent it to you without permission from the lender.

Fire_Fox

seven-day-weekend wrote: »

But it could be in her bank account for six months, then it would be her money, surely, not loaned or given for a particualr purpose? (She could say no, after all).

To the OP, if she can't get a BTL mortgage, she will have to get a Consent-to-Let on a residential mortgage. She can't just rent it to you without permission from the lender.

NO the daughter cannot get a residential mortgage unless she intends to live in the house, you are recommending mortgage fraud!!! Please STOP suggesting hairbrained schemes, you have not thought out or researched the implications. :mad:

Fire_Fox wrote: »

It's already been explained that the problem lies with it being a gift with reservation, the OP expects their daughter to use it to purchase a BTL property and for the OP to be the tenant. How is six months going to change that? What you are proposing is covering tracks - lying by omission? - not changing the fact that it is not a no strings gift.

If there is no written evidence of the agreement for the OP to be the tenant they have no come back if the daughter kicks them out after the first six months and refuses to return the 'gift'. Yet the OP said they "need to be sure that we're safe in case of any future health problems as the years go by!"

WoodruffsDad

seven-day-weekend wrote: »

But it could be in her bank account for six months, then it would be her money, surely, not loaned or given for a particualr purpose? (She could say no, after all).

To the OP, if she can't get a BTL mortgage, she will have to get a Consent-to-Let on a residential mortgage. She can't just rent it to you without permission from the lender.

Does she get the Consent To Let before or after she's bought the property?

JuicyJesus

WoodruffsDad wrote: »

Does she get the Consent To Let before or after she's bought the property?

Please do not give seven-day-weekend's mental scheme any further consideration.

No matter how long the money remains in her bank account, the ultimate source and purpose of the money remains the same. As holly hobby RIGHTLY keeps banging on about, t is not an unconditional gift, it has strings attached - the money is specifically so she can purchase a property for you to live in.

Your entire idea is a can of worms and involves numerous elements of mortgage fraud. If she cannot get a BTL mortgage then it is game over.

seven-day-weekend

WoodruffsDad wrote: »

Does she get the Consent To Let before or after she's bought the property?

It doesn't really matter as long as she does not let it out before she has it. However, it might be easier (and cheaper) if she does it when she applies for her mortgage.

seven-day-weekend

Fire_Fox wrote: »

NO the daughter cannot get a residential mortgage unless she intends to live in the house, you are recommending mortgage fraud!!! Please STOP suggesting hairbrained schemes, you have not thought out or researched the implications. :mad:

I was not suggesting she got a residential mortgage (unless she also got a Consent to Let). I just meant that the money for the deposit would be from her bank, so therefore it would b her money. When my son bought his flat earlier this year, with a gifted deposit, all his solicitor was concerned about was that it did not have to be repaid and that it came from his bank account.

I had a residential mortgage with a Consent to Let in the 1990s, I did not tell the bank any lies. I said I intended to live in the place at some point, but until then wanted to rent it and they quite happily gave me a Consent to Let when I applied for the mortgage. Unless things have changed I don't see how that is fraud?

Fire_Fox

seven-day-weekend wrote: »

I was not suggesting she got a residential mortgage (unless she also got a Consent to Let). I just meant that the money for the deposit would be from her bank, so therefore it would b her money.

I had a residential mortgage with a Consent to Let in the 1990s, I did not tell the bank any lies. I said I intended to live in the place at some point, but until then wanted to rent it and they quite happily gave me a Consent to Let when I applied for the mortgage. Unless things have changed I don't see how that is fraud?

And did you intend to live in the house? Does the OP's daughter intend to live in the house? If the answer to either is no then it is mortgage fraud. The nineties ended twelve years ago, many things have tightened up with mortgages and taxation since this last recession.

As regards the deposit we cannot be clearer than we have been, please read the thread, research the terminology used and the implications.

seven-day-weekend wrote: »

It doesn't really matter as long as she does not let it out before she has it. However, it might be easier (and cheaper) if she does it when she applies for her mortgage.

Doesn't it? Would it? Based on your one experience of somewhere between twelve and twenty two years ago? The clue is in the name: BUY TO LET versus RESIDENTIAL mortgage.

holly_hobby

seven-day-weekend wrote: »

I was not suggesting she got a residential mortgage (unless she also got a Consent to Let). I just meant that the money for the deposit would be from her bank, so therefore it would b her money. When my son bought his flat earlier this year, with a gifted deposit, all his solicitor was concerned about was that it did not have to be repaid and that it came from his bank account.

Yes but I presume you didn't move in with him ? Nor provided the deposit specifically for him to pch a property for you to live in ? And this was confirmed to the lender, in the disclaimer that you had to sign confirming that there the gift was made without requirement of return of the gift or any benefit.

To be clear - a (truly) gifted deposit (family) - is not an issue if there is no reservation in involved - be that a requirement to pay it back (whenever and with or without interest), or any form of beneficial exchange ie in this case, residency.

seven-day-weekend wrote: »

I had a residential mortgage with a Consent to Let in the 1990s, I did not tell the bank any lies. I said I intended to live in the place at some point, but until then wanted to rent it and they quite happily gave me a Consent to Let when I applied for the mortgage. Unless things have changed I don't see how that is fraud?

In todays mge market, consent to let will only be considered if you have owned for at least 6 mths, it is renewable, and lenders can and do refuse the request if they are not happy with the duration of ownership and basis of request.

As I have said previously, there are all sorts of "solutions" to the current problem, all of them currently fraudulent I'm afraid.

Advice to pch a property with no intention to live it it, but rent it out, to A N Other to live there, no only invalidates blds insurance, which breaches mge t&cs, but is also fraudulent from the get go ....

PS - there are BTL mges available (albeit limited) for FTBs - but we are talking her regulated BTLs (which are fewer and far'er inbetween again), AND the blooomin gifted deposit knackers it re the lender criteria in any event - don't know how many times I can reiterate this.

Hope this helps

Holly

seven-day-weekend

[QUOTE=Fire_Fox;57308909]And did you intend to live in the house? Does the OP's daughter intend to live in the house? If the answer to either is no then it is mortgage fraud. The nineties ended twelve years ago, many things have tightened up with mortgages and taxation since this last recession.

As regards the deposit we cannot be clearer than we have been, please read the thread, research the terminology used and the implications.[/QUOTE]

At the time I applied for the mortgage, yes, although this actually never materialised and I sold the place never having lived in it.

I appreciate that times have changed, and certainly didn't mean to suggest fraud to the OP, I thought I was helping.

I still don't see why, if they have given her the money,t is not her money (when we gave our son the deposit for his flat it became his money, in his bank account), but I will bow to superior knowledge.

OP, please ignore what I have said, apparently it is fraud.