First-time mortgage deposit from 3rd party - Problems!

Valanaster

Hi guys. I'm in what surely can't be that uncommon a situation; my girlfriend is looking to take out a first time buyer mortgage in her name only. She has no deposit money. I do. But I can't go on the mortgage as I've not got a permanent contract at work and already have a joint mortgage.

So I just want to give her the deposit money and it's all sorted... BUT it turns out very few lenders will accept the deposit money unless it is a gift from blood relatives, which I'm obviously not.

Which is seriously annoying

Anyone else had this experience or know of lenders who would accept the deposit money coming from me?

Thanks in advance,

Valanaster

Thrugelmir

Gifting money could be an issue. Given you've a mortgage already.

Simon_gloster

If your going to reside at the property and provide the deposit then repossession could become problematic from a lenders point of view hence why none like it. Can't you add yourself on but declare an employment type not taken into account? Easy to get around legally this unless that joint mortgage is holding you back?

Annisele

You may have a further problem if you're planning to live in your girlfriend's house (and presumably you are).

A lender would want to be able to repossess the property if your girlfriend doesn't pay the mortgage. Lenders don't like things that make repossession more difficult - and a gifted deposit from somebody who lives in the house is one of those things.

The problem is that if you've given your girlfriend the deposit money, it looks very much as though you've handed over the money in exchange for the right to live in the property - in other words, it looks like you have rights over the house. Establishing whether you actually do have rights can take expensive court battles.

I appreciate that isn't very helpful, but it might be useful to explain why lenders seem so reluctant to lend.

So far as helpful is concerned, I'm afraid the best I can think of is to suggest you see a broker and explain the situation.

mollyjester

I know some lenders don't/won't do this put perhaps you could be named on the mortgage without your income being considered - I have done it in the past especially when the first lenders income covered the lending, it would mean that you would be named on the title and liable if your g/f didn't pay and would cost money if you separated and wanted to be removed. In addition though you would also be able to draft a deed of trust so if you did separate you could get your deposit monies back.

Usually if the income isn't being considered the lender won't look into your financial position but it would also be tricky being named as you already have a residential mortgage. Broker advice seems like a good move at this stage but legally I agree with the other posts you and the bank are in a sticky situation and I can appreciate why they aren't keen.

A relation of mine received a gift from their ex father in law for a deposit and he had to complete some documents confirming it was a gift and pay it to that persons account before completion but this would waive your rights to the money back if things didn't work out as it would be a gift. The conveyancer should be able to give a bit more advice on this but it may incur additional costs as its above standard conveyancing work and wouldn't be included in fixed fees.

Dave_Ham

No lender is going to accept this gift from you as is.

I would suggest you will have more luck looking at this as a joint application. Get a broker and chat through the numbers, as if you have consent to let/buy to let on the other mortgage it may not hurt affordability as much as you think.

Not all lenders require a permanent position.

Good luck