Mortgage Deposit

fawny

Hi,

I'm sorry if this has been asked before but I'm just trying to get my head around things.

We will hopefully be buying a new house soon, providing we sell ours which has just gone on the market. The deposit for the new house will come from the equity of the one we sell & also my parents are going to give me some money too. The money my parents give us could be around the 40K mark(yes I know i'm very lucky) as my dad says he would rather I have this money now so we can get the house we want. I am assuming that as long as they live for another 7 years(which they should do & I certainly hope they do) we have no tax problems with them doing this?

Will we be asked by the new mortgage company where this money has come from, will they have a problem when I say 40K has come from my parents? We have a list of lenders we can use as I have a house that is let(with CTL) which I can't sell yet due to the prices in that area, but just wondered if the fact my Dad is giving me money will cause a problem? The biggest part of the deposit will come from the equity in the house we sell.

Many Thanks in Advance.

kingstreet

It won't. At worst, you may be asked to obtain a letter from your parents which confirms it's a gift and they are no taking an interest in the property, or charging interest in return.

The seven year thing you are talking about is Inheritance Tax. If they both die within seven years and their estate is worth more than £650k, there could be a liability on the gift they have given you.

fawny

Thankyou Kingstreet, thats great:D