vendor gifted deposit

fonteyn

sorry i meant vendor gifted equity (deposit is cash, unfortunately we don't have that!)

i am trying to buy my mother's home to keep it in the family, she is retired and struggling a little with the running costs.
she has a small amount left on mortgage which would be cleared by the mortgage i will take, but just over half the value would be vendor gifted equity.
i would however like for her to remain living in the property with me after the sale. i have been advised that with a residential mortgage i couldn't collect rent from her, so the arrangement would be rent-free (she would probably make a contibution to the bills instead).
does anybody know any lenders willing to lend here? my broker has tried natwest but it turns out i am blacklisted with rbs due to one tiny misdemeanour a few years back (gutting but they refuse to even discuss it). my credit record is otherwise reasonably good though.
my broker says natwest is the only lender who would have allowed my mother to stay. i really hope that is not the case!?
please help!
why are lenders avoiding this market nowadays?

an alternative could be for my mother to move out (or at least appear to do so) and after the 2 year deal ends I remortgage the property - not to increase my loan but this would separate the gifted equity transaction and potentially allow my mother to officially move back in?

what are the chances of my lender paying a visit during the 2 years to "check" that my mother moved out ??? am I being paranoid here?

amnblog

This is a very complex query.

In these circumstances some lenders want your mother to move out, some will allow here to say. If you are building an annex for here, some will allow it, some will not. Some lenders will want you to put in a cash deposit towards the purchase.

Nat West is not the only lender that will allow your mother to stay.

Whether other lenders will consider your credit situation is another issue.

Where is mum going to 'move out' to if she does move out? A Lender will need to satisfy themselves this is happening.

kingstreet

It would be sensible if you started terming this a concessionary purchase, not a vendor gifted deposit.

The two terms have different meanings, with the latter effectively dead since July 2012.

fonteyn

^ ok, thanks for correcting my terminology - I am not an expert hence why I am on here asking for advise! i got the term gifted equity from intermediary websites and just added the vendor bit because my mother is the vendor! it made sense to me!

^^ so can you tell me please which lenders other than NatWest you know of who can lend allowing my mother to stay afterwards? do i have to pay you for this information and if so how much?

the prefferred solution is that my mother does not move out. there would not be any annex or such it would just be one house.

kingstreet

My comment was intended to get you the help you need from the source you choose. If you call brokers or lenders and ask "do you accept vendor gifted deposit business?" most will say no, without thinking, as they will assume you've researched what the term means.

If you ask about concessionary purchase, they will probably say yes, then ask who is donating the equity to make sure it's a direct/close relative.

If you are looking for another broker, ask friends and relatives for a recommendation. Some of the brokers on here may be interested in your case, but as a general rule I don't transact business with members unless they are in our immediate area and can be dealt with on a face to face basis only.

As a regulated individual, I won't be providing the name of lenders.

Brock_and_Roll

You should also bear in mind that your proposal is likely to have an impact should your mother ever require state funded care such as rest or nursing home fees - deprivation of assets.

Local Authorities these days will spot this transaction - the net result being that your mother (or you) will have to pay the fees out of your own pockets - can be up to £1,000 a week. Obviously if you are planning on caring for your mother yourself then this is not an issue.

fonteyn

^ as to deprivation of assets, i am aware but i'm not sure what the issue is here. if my mother kept the house, and was later assessed, they would tell her to sell the house to pay for her care. so either way she loses the house?

^^ to be honest even the lenders aren't clear/consistent what terminology they want to use. I've found reference to inter-family / gifted equity / deposits / concessionary purchase / etc in various lenders criteria pages. I'm still no closer to finding one of the many that you imply would lend for our situation!!

i only know 1 person in my circle who has used a broker (most just go direct to high street lender) and they already said that NatWest was the only lender who would let my mother stay. so it's back to google I suppose...