Help from parents with deposit

Hi everyone


Looking for some advise.
My Dad has offered to pay the deposit (10%) on a house purchase I am making with my fianc!e. Initially we discussed a Declaration of Trust that acknowledged his contribution, but seems more complex.


He does not want to just give me the money - so not a Gifted Deposit. Effectively it would be a loan with a "pay me at some point in the future when you can afford it terms". Reason for the Declaration of Trust was to protect his interest, and to agree % splits.


Question is how to square this all with the mortgage lender.


Appreciate any advise.


Thanks

Replies

  • kingstreetkingstreet Forumite
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    There are one or two lenders which will accept this as loaned money, as far as accepting your dad putting a second charge on the property. The bulk of the market will say "gift, or no deal."

    You need a competent broker, or get your sleeves rolled up and hit the phone and research lender criteria.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, 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. Please do not send PMs asking for one-to-one-advice, or representation.
  • So can you have a gift deposit, but also a declaration of trust that gives him his money back if the house is sold? With the gifted deposit you have to sign something to say that you have no interest in the property, however the DOT states otherwise.
  • AnotherJoeAnotherJoe Forumite
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    I've got similar with my daughter. The agreement we signed says I reserve the right to get back the deposit when the house is sold. We had to sign an agreement that we would not be living in the house. The mortgage is with Santander.
  • ThrugelmirThrugelmir Forumite
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    So can you have a gift deposit, but also a declaration of trust that gives him his money back if the house is sold? With the gifted deposit you have to sign something to say that you have no interest in the property, however the DOT states otherwise.

    The DoT would only make reference to the property in terms of it being sold. That's a different scenario to having a financial interest. The donor of the gift sits behind the lender in term of repayment as well.
  • lbm123lbm123 Forumite
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    Solicitors drew up an agreement for us which states that when house is sold the deposit will be returned to parents, from the profits made on house.
  • amnblogamnblog Forumite
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    Where you aware that there are products available that would allow your father to assist you with 'the deposit' whilst the funds are kept in a bank account in his name?


    His money need never go into your property. You have no issues with joint ownership or declarations of Trust.


    After three years his funds are free again to do what he wants with them.
    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.
  • kingstreetkingstreet Forumite
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    So can you have a gift deposit, but also a declaration of trust that gives him his money back if the house is sold? With the gifted deposit you have to sign something to say that you have no interest in the property, however the DOT states otherwise.
    No. That isn't what I said.

    There are lenders which will accept it is a loan, not a gift, and will permit him to put a second charge over the property to secure it.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, 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. Please do not send PMs asking for one-to-one-advice, or representation.
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