Gift deposit

JeHu

Hello,

Apologies if i am going over old ground here…

My girlfriend and I are first time buyers.

We want to buy my Aunt's bungalow but we have to act fast as unfortunately she has to go in a home. This will be a private sale.

Almost five years ago i was forced to declare bankrupt so although Experian says my credit rating is now good I am a 'no-go-er' for being put on the mortgage.

A year after the bankruptcy I was in a serious accident. Last year i received compensation which i want to use to buy Aunt's bungalow, this means we are in the fortunate position of being able to secure a 60%LTV mortgage.

However, if i Gift the money i have to sign that i want no part in the ownership of the property or in any future sale. We are both uneasy about this as it's quite a wedge of cash! Would she have to pay a tax on the gifted money?

We are not married nor in an civil partnership. Would this make any difference doing it now or is it too late as she has already been accepted by the lender so therefore it would be a change of details..?

Can anyone offer advice, I would like to have my name on the deeds
What would happen if something bad were to happen, would i have any rights or would she need to write something into her will and would that mean i would need to pay some sort of tax?

Many thanks for any advice given my brain hurts!!!

Mojisola

JeHu wrote: »

We want to buy my Aunt's bungalow but we have to act fast as unfortunately she has to go in a home. This will be a private sale.

You don't have to rush through with the sale. The council will fund your Aunt's care home while the sale is being organised and claim the money back when the sale goes through. Ask about "deferred payments".

Thrugelmir

No lender will be comfortable with you gifting money to your partner then residing in the property yourself. Without being named on the mortgage.

Mojisola

JeHu wrote: »

My girlfriend and I are first time buyers.

We want to buy my Aunt's bungalow but we have to act fast as unfortunately she has to go in a home. This will be a private sale.

The council will expect the house to be sold at the full market price - have you had several EAs round to give a price on it?

If the council think it's been sold under value, they can assess your Aunt as if she had received the full market price.

Yorkie1

Thrugelmir wrote: »

No lender will be comfortable with you gifting money to your partner then residing in the property yourself. Without being named on the mortgage.

+1 for this post. I don't think your idea will succeed.

JeHu

Many thanks for your input.

Natwest are happy for me to be living there, they are one, if not the only mortgage lender that are happy to do so.

The property has been valued by three estate agents, whose valuations vary wildly!

Aunty is moving into a private health care facility near to the house so currently the council have no interest.

It seems that there is no way around this other than for my partner to take out the mortgage, me to gift her the deposit and for us to wait until my period pf bad credit is over. Then we remortgage and hope that I can get my name placed on there.

If we were to get a civil partnership or to get married what difference, if any, would that make?

Thanks again!

Annisele

JeHu wrote: »

Natwest are happy for me to be living there, they are one, if not the only mortgage lender that are happy to do so.

I'm very surprised at that. Does NatWest know you'll be contributing to the deposit and living in the property? If you're not going to be named on the mortgage then one or the other of those is fine - but generally not both.

Do you have that in writing from NatWest? I wonder if somebody somewhere has misunderstood what you're planning to do.

The property has been valued by three estate agents, whose valuations vary wildly!

Aunty is moving into a private health care facility near to the house so currently the council have no interest.

The council will take an interest if (to be blunt) Aunty's money runs out. I think you'd have to take a view on how likely that was - and take a view on whether your plans disadvantaged Aunty by paying less for her house than she'd get on the open market.

It seems that there is no way around this other than for my partner to take out the mortgage, me to gift her the deposit and for us to wait until my period pf bad credit is over. Then we remortgage and hope that I can get my name placed on there.

If we were to get a civil partnership or to get married what difference, if any, would that make?

Thanks again!

That would leave you in an extremely vulnerable position. You'd be less vulnerable once you got married/civil partnered - but still vulnerable if your name wasn't on the mortgage and deeds. On divorce, you might get half the house - but if your partner decided to take further advances and gamble away all the money, there'd be very little you could do about it.

jumperjohn

What makes you think you wouldn't qualify for a mortgage, a previous bankruptcy wouldn't necessarily be a detriment to your application although other information might. Apart from the bankruptcy if the credit files look ok, well run accounts and no missed payments, defaults etc then why not apply. Do you have an income?

JeHu

Hi there, thanks for your reply...

Annisele wrote: »

I'm very surprised at that. Does NatWest know you'll be contributing to the deposit and living in the property? If you're not going to be named on the mortgage then one or the other of those is fine - but generally not both.

Do you have that in writing from NatWest? I wonder if somebody somewhere has misunderstood what you're planning to do.

Yes, this has all be explained, we went through London & Country and explained the situation. The paperwork came through with my name on there saying that I will be living in the property. Whether or not it comes back and they change their mind, only time will tell...

The council will take an interest if (to be blunt) Aunty's money runs out. I think you'd have to take a view on how likely that was - and take a view on whether your plans disadvantaged Aunty by paying less for her house than she'd get on the open market.

I don't think that will be a problem, she didn't sell it to us for that much under the market value - she may be 91 but she still knows how to drive a hard bargain! What with the work that needed doing on it there wasn't a significant reduction in price, it was more a case of not paying agency fees.



That would leave you in an extremely vulnerable position. You'd be less vulnerable once you got married/civil partnered - but still vulnerable if your name wasn't on the mortgage and deeds. On divorce, you might get half the house - but if your partner decided to take further advances and gamble away all the money, there'd be very little you could do about it.

ONly time will tell on this last bit… guess i just have to take a risk at this point, the benefits seems to be outweighing the risks...

Thanks again for your help and advice everyone!