Loaned deposit from family

Black_Eyeliner

I'm not encouraging anybody to do anything. I'm sure the OP is more than capable of making his/her own decision.

Goldiegirl

Lying to the lender isn't a good start - not to be recommended really

Funny_old_game

When and if the loan goes bad and there is equity, that person has no right to their money back if the borrower goes bankrupt etc.

The mortgage for affordability purposes is based on not 1p being paid back so the lending decision us distorted from the outset.

Thrugelmir

Black_Eyeliner wrote: »

I think the money has to be gifted. But I can't see why you can't make a private arrangement to pay your family back without telling your lender.

The agreement would have no legal standing. As it's already been confirmed as a gift.

saving2704

If it is any kind of loan it will be counted towards your affordability and may affect what you can borrow

tigsly

I guess partly this will come down to people. If your parents trust you they might be comfortable to 'give' you the money. if you can 'give it back when you can afford it'.. and realise there will be no 'agrement as such.

My parents have loaned me money before (all be it not to buy a house) and I have always paid them back.. we have never drawn up an agrement.. I'm sure if I asked for a loan to buy a hosue- they would willingly lend me money on the provisio I paid it back - wihtout any paperwork.

That said - a friends parents lent them money to buy a house (i'm sure it was a 'gift' as it had to be) and the parents have not seen a penny of it back..and I dont see them seeing any of that money anytime soon..

Cheddargorge

Thanks for your responses everyone, you have all been very helpful. A gift is the only option then. I would be fascinated to understand how many gifted deposits really are gifted given the debate that has broken out on here!

Thrugelmir

Cheddargorge wrote: »

I would be fascinated to understand how many gifted deposits really are gifted given the debate that has broken out on here!

If people wish to take the risk then they have to accept the consequences. As with all undocumented legally unenforceable arrangements everything's fine until for whatever reason the relationship breaks down between the parties.

As with all matters financial ultimately trust is the key.

Foxy-Stoat_3

Reason why the lender needs it in writing from the person gifting cash is if that person became bankrupt or insolvent within 5 years then the gift, or loan in this case, could be legally reclaimed to cover the debts by creditors should it be discovered.

I would assume that there has been a case in law where this has happened and lenders are backside covering.

Its either a gift or a loan.

Thrugelmir

Foxy-Stoat wrote: »

I would assume that there has been a case in law where this has happened and lenders are backside covering.

Insolvency Act legislates against such transactions, not least to avoid the hiding of assets.