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Business loan for home deposit - request for advice
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anyhelpappreciated23
Posts: 4 Newbie
Hi all,
I would be grateful for any advice regarding the legality of using a loan taken out through a family business to contribute to a deposit for a residential house purchase.
A family member has suggested taking a loan (in the region of £30k) out on their business, gifting it straight to me (without me having to repay them) and combining this with my own funds to put down a deposit on a house.
I am not sure if this is legal or not so I would be grateful for any advice.
Kind regards.
I would be grateful for any advice regarding the legality of using a loan taken out through a family business to contribute to a deposit for a residential house purchase.
A family member has suggested taking a loan (in the region of £30k) out on their business, gifting it straight to me (without me having to repay them) and combining this with my own funds to put down a deposit on a house.
I am not sure if this is legal or not so I would be grateful for any advice.
Kind regards.
0
Comments
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Bit confused here.
If the business is giving you a loan it is not a gift.
It is legal if declared, most lenders do not accept loans as part of deposit but it can be done in theory with the right lender.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Hi,
Thanks for your reply. Sorry I wasn't clear. The suggestion is that the business takes out a loan from a bank, and the business owner then gifts me the value of that loan, which I then use as part of a deposit on a house.0 -
Where the donor gets the funds is not an issue (as long as it is legal).
The donor will need to be a close family member and provide a gift letter.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
How is the business owner planning to account for giving away £30K? Not a problem for you but I can't see how he would put it through the books. Unless he takes it as a directors loan and then gifts you the money personally, and then pays back the money himself? Seems a convoluted way of doing things.0
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Thanks all. I'm told by the business owner that their loan is in fact a personal loan, not linked to the business. It would be based on their earnings as directors.
I assume this would be fine to be gifted to me for use as a deposit?
Regards.0 -
Do they expect you to repay them?0
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No they do not.0
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