Deposit Gift From Parents

MrDebtWarrior

Hi, I have searched the threads for similar questions, I couldn't find any that answered my query, hence the new post.

My parents have offered to gift a deposit to myself and my GF.

This would be 10% of our required value (between £10k - £15k)

1: What are the issues surrounding a 'Gift' deposit? Do lenders treat them differently to 'own savings'?

2: If we only have the gift deposit, and no savings of our own, will this hamper our chances of a mortgage?

I know this is a wide question but just looking for some guidance on how to move forward.

For info, we have rented for 2 years, both have good credit history ie no defaults/bad debt/pay day loans - around £50k combined salary.

Thank you

kingstreet

Not particularly and no.

If your case is borderline to start with, it may not help too much though.

Depending on chosen lender, you may require a gifted deposit letter or pre-printed form and parents may be asked to provide bank statement to evidence source of funds.

md87

I may not be able to answer all of your queries, but from a legal point of view a "gift" means they are giving you the money and there is no agreement for you to pay it back. They may have to sign something to say that the money is given to you as a gift, as opposed to a loan, but other than that it should be treated as your money. You usually have to show how the money was obtained, due to money laundering regs.

Your chances of getting a mortgage are based on the initial deposit, which you say you can get via the gift. In addition it would depend on whether or not you can afford the monthly repayments, which would then entirely depend on your income and your girlfriends income. If your combined salary is 50k then I don't think you will have any problems, as you state the gift will be for 10% of the property value, so your looking to pay up to 150k. Definitely affordable in my view.

MrDebtWarrior

Thank you for your prompt replies.

Money is from my father, he retired recently and decided to take a lump sum offer, so easily proved.

We will also be eligible for the Help To Buy scheme if we go for a New Build so potentially we would be looking for a 70% - 75% mortgage.

- I've not even started this process and my nerves are going mental

kingstreet

Kevvlar wrote: »

We will also be eligible for the Help To Buy scheme if we go for a New Build so potentially we would be looking for a 70% - 75% mortgage)

Pretty much the world and his brother are eligible for HTB - Equity Loan if they buy a newbuild.

Other than the affordability calculator, if you can get a mortgage and won't own any other property at completion, you're in...!