Borrowed money put into an ISA - where do I stand?

hlou

Hi

A couple of years ago, I borrowed some money (£5000) from my mum towards a flat deposit, however we ended up not needing it at the time and putting it into an ISA.

We are now in a position where we need some of the money (around £2000), but have been able to pay the rest back to my mum.

When applying for our mortgage, our accounts have been looked into in depth, and the ISA money has been questioned and we are needing to explain what money has come in and what money has gone out.

My mum is self employed and on a low income, and on her tax returns we have never mentioned borrowed money - purely through not even considering it as a 'loan'! However, I am now concerned because I am being asked where it has come from/gone to - how could this affect one or both of us please?!

Thanks!

Archi_Bald

It's not unusual for people to save up £5,000 in an ISA, and it's not unusual that people want to spend some of their savings - particularly if they have a house. £2,000 for decorating, curtains, furniture, appliances etc is peanuts.

You would make life easiest for you if you just don't even mentionyour mum and loans from her, particularly since you have paid everything back to her. It's quite irrelevant now - the £5K are yours.

atush

Just say you lent the money or spent it?


I can't remember anyone asking me what I did with my savings before I opened a mtg? Not in this depth anyway. Odd.

sorcerer

Why don't you tell them the truth, it was a gift from your mom to help with the mortgage. I don't really see a problem unless your mum has give you money and left her under the threshold in savings for benefits she might be claiming.

Annisele

The only issue I can think of is to do with means tested benefits for your mum - but there may well be issues I haven't thought of.

There are some benefits that you can only claim if you have less than (say) £16k in savings. If she had £16k, then transferred £6k to you to make it look like she only had £10k, then claimed one of those benefits, there might be an issue.

Who is looking at your accounts in depth? As others have said, it sounds like an unusual level of scrutiny.

hlou

My mum is not claiming any benefits of any sort.

The reason it is being looked at in such depth is that our home address comes up as two different addresses for an unknown reason. This means that we have our salaries paid into one address, and due to automatic post code systems, our mortgage is being taken out on a supposedly 'different' address. It is, of course, just one flat that we live in, but the address sometimes comes up as one name, and sometimes another - depending on the post code system that a particular company use.

Another unfortunate situation is that the previous tenant of our flat left behind several thousand pounds worth of debt, so although we have been here for almost a year, we still regularly receive debt collection letters for her.

This combination of events has meant that although we are in a comfortable position to afford the actual mortgage itself, the building society's system requested further investigation - and it is apparently an extremely thorough investigation!

xylophone

Your mother made you an interest free loan so that tax doesn't come into it?

You put the money into an account pending your need to use it - you have used £2000 but don't need the rest so have repaid your mother?

You intend to repay her the £2000 when you can?

If the above are the facts, just give them to the prospective mortgagee?

And clarify your correct post code with Royal Mail?

hlou

the post code is correct, but for some reason, it sometimes shows as flat b, and other times shows as top flat. very confusing and I'm really not sure why it happens!

xylophone

How is your property recorded at the Land Registry?

hlou

Im not sure...how do I check this?