FTB would need to borrow deposit

Margarita

Hi,

My daughter is hoping to buy but lacks a deposit. I can lend/give her the money but would a mortgage provider look unfavourably on this?

What is other people's experience? Thanks.
Margarita

[Deleted User]

You can gift her the money, you cannot lend it. You would need to sign a letter saying the money was a gift, that you didn't expect it back, and that you had no interest in the property or intention to live in it.

Margarita

Would it count against her if I did that? I.e. the fact that she hasn't been able to save a deposit?

Wassa123

It's fine.

They may need to see proof of where it came from (just like your daughter would have to prove if she had it in the first place).

You might also need to sign a form along the lines of "This deposit is a gift and therefore I have no interest or claim over the property"

Wassa123

Margarita wrote: »

Would it count against her if I did that? I.e. the fact that she hasn't been able to save a deposit?

No. As long as she can prove she can afford the repayments (3 months bank statements, pay slips, etc) and shes not spending the majority of her salary on it and that it remains "affordable" when the rates increase.

elvenlomadia

We were gifted the whole deposit on our house (15%) - we had some savings but these are being put towards modernizing the property instead. No problems at all with Natwest, though they did need a letter stating the above.

Mossfarr

It isn't unusual for a first time buyer to have a 'gifted' deposit so not difficult to secure a mortgage.
The mortgage provider would want to be certain that your daughter could manage her finances and be able to afford the repayments. They may also ask you to stand as guarantor.

Margarita

I am not sure that we would be able to stand as guarantors being retired, although we both have work and state pensions and our own house is paid off. Her own income should be sufficient if 3.5 times is allowed, and her job is permanent and as secure as any these days.

So, it sounds reasonably promising.

SmlSave

If you are happy giving her the money and trust her to pay it back then don't tell the mortgage people that the deposit is borrowed. Just say it's savings/inhertitance.

We borrowed money from dad and I pay him a monthly amount. The money got transferred to my account and then I forwarded it to my solicitor.

marksoton

SmlSave wrote: »

If you are happy giving her the money and trust her to pay it back then don't tell the mortgage people that the deposit is borrowed. Just say it's savings/inhertitance.

We borrowed money from dad and I pay him a monthly amount. The money got transferred to my account and then I forwarded it to my solicitor.

Technically fraud.

And good luck trying to explain those payments when remortgaging.

Amara

marksoton wrote: »

Technically fraud.

And good luck trying to explain those payments when remortgaging.

How bank/authority will be able to prove, it was technically fraud? Once payments stopped, no problem here. You can always tell bank : "My mum and dad went into hardship and I helped them".