Can you borrow money from friend/family to buy house

ComputeAngel

Quick question guys...

- Can you borrow (interest free) money from friend/family to buy house (with mortgage) without any legal complications?
- How about if they are not living in UK?

Thanks

kingstreet

A loaned deposit will cause problems with many lenders as they will view it as an interest in the property.

A loaned deposit from outside the UK will cause even more problems with even more lenders as it has both interest issues and money laundering issues too.

Speak to lenders and solicitors who will have to handle this, before proceeding.

ComputeAngel

kingstreet wrote: »

A loaned deposit will cause problems with many lenders as they will view it as an interest in the property.

A loaned deposit from outside the UK will cause even more problems with even more lenders as it has both interest issues and money laundering issues too.

Speak to lenders and solicitors who will have to handle this, before proceeding.

Thanks for replying

I think i need to rephrase the question.

e.g. My bro is living in US. I am living in UK and looking to get a mortgage. Now can I borrow money from my bro for initial deposit?

This money will be a contribution from him towards my mortgage and he is not going to ask for his money back...

kingstreet

Is it a gift, or is it a loan?

If your brother will sign a letter which reads;-

I confirm that I am gifting the sum of £x to my brother YYY in respect of the purchase of the above property. I also confirm that this gift is non-refundable and non-interest bearing and I will not retain any interest in the property whatsoever.

This is the difference.

As mentioned, money coming from outside the UK will be of special interest to the solicitor acting for you as it's the solicitor's money laundering requirements you have to satisfy.

ComputeAngel

kingstreet wrote: »

Is it a gift, or is it a loan?

If your brother will sign a letter which reads;-



This is the difference.

As mentioned, money coming from outside the UK will be of special interest to the solicitor acting for you as it's the solicitor's money laundering requirements you have to satisfy.

It will be a gift. Do I have to pay any kind of tax on that money?

kingstreet

None I can think of.