Borrowing deposit money from family and friends for Mortgage

holly_hobby

As highlighted in earlier post

holly_hobby wrote: »

You either save, or lie on your application (or to the Solicitor) - as one or the other will ask for source and proof deposit - which obviously will result in a fraudulent mge applciation.

and the above ...

holly_hobby wrote: »

Have Bro and Cousin, now decided their contribution is not a loan but a complete unconditional gift i.e made without any requirement of return or consideration ?

If not, regardless of who is providing the capital, its not a gift, and won't be accepted by the lender.

Hope this helps

Holly

preshoabi

The plan is they are happy to lend us money, and if it causes any tax/fee implications they are happy to change it accordingly. If gift is feasible then its a gift. Otherwise its interest free money lent to us to be paid back when ever we are ready. Hope I am clear. Thanks

holly_hobby

Its either a gift (and they dont' want it back) or its not (and they do want it back) .... which is clearly the case here they want it returned (or it appears they are happy to lie and say its gift when in reality its not !).

As suggested way back when, saving your own deposit is the answer to the issue.

Hope this helps

Holly

preshoabi

Ok then the bottom line is, if we are borrowing money from our family, we declare it and pay any charges on it in order to avoid any legal implications keeping it safe and legal in all ways. Am I right?

marathonic

I dread the thought of oweing so much money at a juncture in your life where expenses are expected to increase due to maintenance, house bills, furnishing, etc.

What if you happen to lose your job (many thought they never would and find themselves in a very tough predicament now).

As a new homeowner, one of the big advantages that gives me comfort is the independance I have gained. I'm not so sure that sense of independence would be the same if I owed anyone, other than the bank, a lot of money.

holly_hobby

preshoabi wrote: »

Ok then the bottom line is, if we are borrowing money from our family, we declare it and pay any charges on it in order to avoid any legal implications keeping it safe and legal in all ways. Am I right?

OMG NO ....

If it is a loan from your family, then the lender will not accept it due to the benefical ownership issues it gives the Donor, and thereby may prevent any future possession order the lender may seek.

Hope this helps

Holly

marathonic

preshoabi wrote: »

Ok then the bottom line is, if we are borrowing money from our family, we declare it and pay any charges on it in order to avoid any legal implications keeping it safe and legal in all ways. Am I right?

The bottom line is that, if you borrow money and have to pay it back, the bank will view you no different to someone that takes a 10,000 cash advance on a credit card to use for their deposit....

EDIT: See Holly Hobbys response below. I thought about it a little longer and it would make sense that they'd view you as higher risk than someone borrowing on a credit card to source the deposit.

holly_hobby

marathonic wrote: »

The bottom line is that, if you borrow money and have to pay it back, the bank will view you no different to someone that takes a 10,000 cash advance on a credit card to use for their deposit....

Its unsuitability is in respect of the surrounding possessionary issues (along with any additional impact to affordability any regular repayments will cause).

Holly

preshoabi

It isnt a loan, because we are not paying any interest. They are lending it in order to help us buy our first house. We can get legal statements from them saying that we dont need to pay any interest on it from them and keep it straight forward.

Sorry for being a pain. I am just trying see if things can work out and follow procedures legally.

Thank you all for your advise here.

holly_hobby

preshoabi wrote: »

It isnt a loan, because we are not paying any interest. They are lending it in order to help us buy our first house. We can get legal statements from them saying that we dont need to pay any interest on it from them and keep it straight forward.

Sorry to be direct, but you simply don't (or don't want to) understand the underlying principal.

A loan is not defined by whether the addition of interest is reqd, but if its provided by the Donor with the requirement of repayment by the Donee .

Whether they charge you interest for the privilidge is immaterial ....

If it walks like a duck, looks like a duck and quacks like a duck ... then its a duck (or in this case a LOAN) .. no matter how you try and paint it otherwise.

Hope this helps

Holly x