family gift/loan -will it impact mortgage application

tarab1986 · 15 February 2015 at 11:21PM

apologies for the long post

So last summer I was involved in a car crash (a long story in itself) - my car was written off and I still had an oustanding car loan which wasnt entirely covered by the insurance cover. My Gran very kindly gifted me around £5000 to clear the loan and to purchase another car. At no point did she expect repayment........ However my pride and dignity meant that I have insisted on repaying my Gran and give her £100 a month towards this.

Fastforward a year and now Im busy clearing my creditcard debt and overdraft in preparation for a mortgage application with my partner over the summer (I will be officially debt free by the end of May).

However its just occured to me that on my bank statements will be a regular payment to my gran repaying this gift. If this is queried is it a case of my gran confirming that its a gift? or by me repaying it does that make it a loan?

Any advise is welcome

thanks

amnblog · 16 February 2015 at 9:34AM

If it is important for you to repay your Gran you will continue to do so once you have the new mortgage in place. Therefore the £100 a month should be affordable as part of your outgoings when you apply.