Gifting deposit to OH - possible / issues?

coverjudged

Just wondering about the potential issues of helping my OH wit the deposit for a potential mortgage. We intend to live together, however as I am a student I will not be involved in the mortgage at all. However I do have savings which I wish to contribute towards the deposit, he has a past default so in addition to seeking a better rate, having a 15% deposit would benefit us. Am I able to gift this to him?I have only seen advice about parents gifting.

Would it be affected by the fact I intend to live there? Or that I am not his parents basically, or are gifted deposits fine from anywhere? I am aware of the mortgage consent form, or alternatively I could just move in after completion.

NB. Its not the whole deposit I would be gifting, probably 1/3-1/2 to bump it up.

Also he intends to go through Halifax, if there's any specific info on gifted deposits with them.

Any advice would be great.

holly_hobby

If you are to live in the property, and you are contributing to the deposit, you must go on the mge application for this to proceed - otherwise the source of deposit will be rejected (whether you are happy to gift it without reservation or not).

This is because it gives you benefical ownership rights, which may prevent the lender seeking a future possession order. The lender may not ask the source of deposit on the app, but the conveyencer will ask for proof and source of funds before completion takes place, which due to the issues discussed will cause this to later fall out of bed.

The fact you have no income is fine, you just go as 2nd applicant, whilst partner whose income it will be assessed upon, goes 1st ( main applicant) - that way your contribution to the deposit is fine and you have joint legal ownership of the property (and responsibility to pay the mge) with your partner.

You may want a sep trust deed in place (conveyencer will assit) regarding the return of your deposit if you split up and sell up, and if your contribution is unequal to your partners.

Hope this helps

Holly

coverjudged

I am only concerned about being on the mortgage as I have credit card debt (all 0% and being paid off before the deals end, but approx £2K in total) and am worried this would affect the mortgage application. I do have part time income of £4.5K but the Halifax online mortgage calculator indicates that me as a 2nd applicant would decrease the amount we could borrow, I assume its because of my debt to income ratio (other banks doesn't seem to decrease, just the normal 4x income). I have no problems covering the payments, and probably have better credit than my OH (just no ft income) but don't want to !!!!!! the application

holly_hobby

Contributing to the deposit, if you come clean, will mean you have to go on the app.

You could conceal its source or lie about it, and stay off the app (albeit it woudl be fraud) - but also means you're not on the deeds or noted as having any legal ownership - this means your partner could secure finance on it or even sell the property without requirement of your signature ... dodgy game to play if you're not married.

Hope this helps

Holly

coverjudged

Thanks for the advice, will have to have a think about how to proceed.

holly_hobby

Good girl ... don't jump in before you've made sure you and your pennies are protected if the worst should happen.

H x