can i use credit card to pay mortgage deposit

flynn1

I want to pay towards the deposit for my daughters house, can I use a 0% credit card to do this? if so will it just be classed as a purchase ie I just pay the mortgage lender or will I have to ask for a cash transfer and pay a fee? this is a gift and I don't have any claim on the property. appreciate advice on this

Ant.Evs

As far as i am aware you cannot pay a Mortgage depost with any form of credit.

You would however be able to do a transfer to your bank from a credit card (if you have one that does that) then give your daughter the cash. Dont however tell the lender that it is from a credit card for obvious reasons.

Hope this helps and im sure somebody will be along soon to confirm if i am correct or not lol

lisyloo

I believe that's correct.
There are two reasons. One is that in general lenders don't accept credit cards, secondly part of the point of the deposit is to demonstrate the borrower can save up so they aren't keen on it being funded from borrowing. They can't actually enforce that but they can refuse to be party to it.

I think you'll have to get a card that allows a transfer to your current account. There are generally fees for this so you'll have to decide if it's worth it.

BTW - if this gift is over £3K then it's not exempt from Inheritance tax if you die within 7 years.
It would be wise to make sure there is provision to pay the Inheritance tax if the need does arise.

CLAPTON

flynn1 wrote: »

I want to pay towards the deposit for my daughters house, can I use a 0% credit card to do this? if so will it just be classed as a purchase ie I just pay the mortgage lender or will I have to ask for a cash transfer and pay a fee? this is a gift and I don't have any claim on the property. appreciate advice on this

Generally the deposit is paid to the buyer's (your daughter) solicitor. I doubt they will accept credit cards in any event.

kwmlondon

My vendor raised the asking price for my house the day before we exchanged contracts. My mum put £10k on her credit card and the solicitors were perfectly happy with this as long as my mum confirmed, in writing, that this was a gift and not only did she not need to be repaid but that she would not have any kind of rights to the property.

However, there was a 3% credit card fee...

I have, since, taken the whole debt off my mum and have it on a 0% card so it's actually working out cheaper than the mortgage.

So yes, you can do it. I did.

DigForVictory

In an emergency like that most solicitors would turn a blind eye so hold the chain together, but 99% of the time I think they'd refuse.

Not worth counting on IMHO.

Picky

My solicitor required evidence about where the money for my deposit had come from, so I had to show bank statements of my ISA with all my savings in there. They said it was for money-laundering purposes. Not sure how they would have dealt with this sort of situation.

lisyloo

Not sure how they would have dealt with this sort of situation.

Well if it's really for anti money laundering then showing it came from a credit card company would be fine.
Their intention is that instance is that they want to make sure it's not the profit from crime. A credit card statement should do fine to prove it didn't come from drug runnng.

CLAPTON

kwmlondon wrote: »

My vendor raised the asking price for my house the day before we exchanged contracts. My mum put £10k on her credit card and the solicitors were perfectly happy with this as long as my mum confirmed, in writing, that this was a gift and not only did she not need to be repaid but that she would not have any kind of rights to the property.

However, there was a 3% credit card fee...

I have, since, taken the whole debt off my mum and have it on a 0% card so it's actually working out cheaper than the mortgage.

So yes, you can do it. I did.

how did she do that?

are you saying the solicitor accepted a credit card payment?

kwmlondon

CLAPTON wrote: »

how did she do that?

are you saying the solicitor accepted a credit card payment?

Yes, my solicitors have online payment. It's 2014 you know...

They don't charge for debit card payments but there's a 3% fee for credit cards.