Can Parents gift equity even thou son-in-law will have mortgage?

bobbyzzz_2

Hi, my parents bad bought a buy to let property for 245,000 (55k deposit, 191,000 mortgage). They now want to give the property to their daughter (my sister) and her husband.

They want to give the equity as a gift. So my sister and her husband just need to find a mortgage. My sister has a few glitches on her credit file, however her husband has a good credit score, so they are going to apply to get the mortgage solely on her husbands name; with the house being in my sister's name.

The thing is a mortgage adviser has said if the parents are gifting her the equity, the house has to be in her name therefore she has also got to be on the mortgage - can't gift equity if the relative isn't on the mortgage.

Is this true, and if so, any options?

kingstreet

The usual option would be a purchase from a family member at undervalue, but this can't be done if the daughter isn't going to be party to the mortgage. She can't be party to the ownership if she isn't party to the mortgage, so that's a non-starter too.

The opinions they have so far are correct.

How bad's the credit history? With the equity in the property there may be options if we're talking a few late payments. If we are looking at a string of four figure defaults and court judgments, it's probably not going to happen.