Parents to provide 100% cash for purchase, then how to get a mortgage in 6months?

Richard01

Good morning team,

Perhaps a slightly unusual request however I'm sure this forum will come up trumps!

To summarise: My girlfriend and I are attempting to purchase our first home however she doesn't start her full time job until September (full time primary school teacher) however we want to buy now in a rapidly booming property market (Bristol). My parents have kindly offered to purchase the house outright (100% cash) however put the property in our names with land registry - it will be our home. This is simply a short term fix.

In 6months time we would like to take out a mortgage on the property with the mortgage instantly repaying my parents and so having a normal mortgage agreement.

What I would like to know is how is the best way of going about this, will lenders still be able to offer us a 'first time buyer' deal even though the property is already in our names and will they be happy lend full stop? Presumably we wouldn't have to purchase the property twice e.g. pay two lots of conveyanceing, stamp duty etc.

I would imagine that this is often done, however cant seem to track down any info.

Your help in the matter would be most appreciated and I lookforward to hearing from you,

Many thanks,

Richard :beer:

Foxy-Stoat_3

Whats the purchase price and how much are your parents expecting to get back 6 months later?

What will be the total household income?

I don't think this is often done as normally the parents gift the kids the deposit and thats the end of it, as folk don't have 6 figures sitting in the bank ready to buy houses outright.

I would hope your all speak to a solicitor and you make a Deed of Trust with them and your Girlfriend should the worst happen.

Also, make a Will out.

Wh05apk

This is potentially possible, however will depend on the loan to value.


Better to speak to a broker, as if your gf has a job offer, there are lenders who will accept that.

Mojisola

Richard01 wrote: »

My parents have kindly offered to purchase the house outright (100% cash) however put the property in our names with land registry - it will be our home. This is simply a short term fix.

If the house is in your names, it will be yours. Will you have something on paper to say the house price is a loan and you will be paying it back to protect your parents' money?

You won't get 100% mortgage so you won't be able to pay all the money back when you get a mortgage. What's the plan for repaying the excess?

If the house is in your joint names and your relationship breaks up, your GF will be entitled to walk away with half of your parents' gift. Are they happy with that possibility?

Do you have any siblings? If one or both of your parents died before the debt was repaid, would that cause any problems re inheritance?

Richard01

Many thanks for your prompt responses,

The purchase price of the property is around £200,000 - in a previous property purchase they had released equity in their home freeing up the cash and effectively giving them the cash in the bank; making this option possible, fortunate I know.

I personally have enough for around a 15% deposit and so the mortgage value will be around £170,000 to which I trust the mortgage providers would load against (85% LTV).

We will have something in writing stating that this is only a loan to be repaid in 6months time (I do have siblings and they did something similar in the past however this only acted as a bridging load - my sister already had a mortgage in place). Additionally a deed of trust will be implemented for the reasons mentioned above.

Unfortunately we have been in touch with a broker and they were unwilling to include her job offer for the mortgage offer. To be honest I thought that this would have done by others but by gauging your responses perhaps not all that often?

An alternative option would be to borrow the difference "as a gift" so say £50,000. This way I could take out my own mortgage and then re-mortgage in 6months time to include my girlfriends teaching salary. Would this alternative option work or would I have to wait 2years before re-mortgaging?

Thanks again for your in-put it really is most appreciated.

GMS

You should try another broker.

There are lenders who would accept the job offer.

Doing it with borrowed cash will mean 2 sets of legal fees and lenders who may not be happy to refinance so quickly.

Better to explore a long term option fully before opting for plan b so to speak.

ACG

I was going to say the same as GMS, some lenders will offer you a Mortgage now knowing she starts in september.

By the time you complete it would July time anyway possibly even august if you dragged your feet.

Richard01

Yea I completely understand what you're saying and of course this would be the preferred method of obtaining finance. I certainly could try another broker however from the independent advisors I've spoken with in addition to the lenders themselves this hasn't been a feasible option - instead shut down immediately. I don't suppose this forum allows you to recommend lenders or broker whom might lend in such a situation?

Thanks again

duchy

How long do the brokers say she will need to be working for before you can apply ?

getmore4less

Do they NEED the cash back.

Why not pay them back over time.

Be carefull with the loan agreement you need to word it so you acound for not being able to mortgage and your potential deaths, get wills made up as not married.

GMS

Richard01 wrote: »

I don't suppose this forum allows you to recommend lenders or broker whom might lend in such a situation?

Thanks again

A broker couldn't say a lender as this would be seen as advice. We cannot advise without having assessed your circumstances and needs.

Maybe if you list the lenders you have tried we would know if one has been explored who would consider?

Perhaps you could start the process with your parents planning to fund it and try for a mortgage at the same time. At least you know all of the legal work hasn't been for nothing if a mortgage cannot be sourced. If it can then then complete using this.