Dad gifting me £50,000 for a mortgage?

theoallen

Hi there,

I don't know why I should be asking this question as I already think I know what I want to do. But I just need some other opinions.

Basically, me (21) and my girlfriend (also 21) are trying to save for a house. My dad has offered to gift me £50,000 for a deposit which is great. My girlfriend doesn't really get on with him however and is slightly apprehensive about it not wanting to be in his debt (not financially, as its a gift, but obviously we'd owe him something for being so nice). Would it be a stupid decision to turn this offer down? Especially in the current housing situation?

Also, I earn £40,000 and my girlfriend earns £24,000, so with this deposit and our current salaries, would we be able to get a good mortgage? What kind of price would we be able to afford?

Cheers,
Theo

David_White

I can understand your partners point of view so I guess it boils down to what feels right maybe more so than what the mortgage deal would be.

From a financial point of view it makes sense, however if you'll always feel indebted to them then perhaps not.

SeduLOUs

As I'm a pessimist and assuming you are getting a joint mortgage, I would suggest that you need to do something to protect the gift as being 'yours' should the relationship come to an abrupt end (possibly by adjusting what percentage of the property you own).

From girlfriend's point of view, she might actually be happy with the arrangement if she doesn't want his help, as he would technically only be helping 'your' share.

Without something in place, if it all goes south in and you split up in the next few years, she'll effectively have had a £25k gift from your dad that neither of you would be able to recoup. Maybe you don't care, but thought it worth mentioning as something to consider now rather than it potentially becoming a horrific realisation down the road.

Sorry to be the party pooper!

theoallen

Yes completely agree! I will be getting something drawn up! No plans to ever end it with her, but who knows what the future holds!

SeduLOUs

theoallen wrote: »

Yes completely agree! I will be getting something drawn up! No plans to ever end it with her, but who knows what the future holds!

Well I expected that you don't have any plans to break up if you are applying for a mortgage, but we all know how these things can sometimes go.

I'm in a similar boat where bank of mum and dad is going to look at equity release to get some of my inheritance to me now to help get me set up (less money now, but a bird in the hand and all that). Partner is more than happy to take precautionary measures to protect that element as being mine should everything eventually go to squat.

Zeebs90

We are in the process of doing the same thing, my dad has gifted us a deposit but we are having in drawn into the contract that should anything happen in the future the deposit will be returned to me rather than split equally. This has given everyone involved peace of mind and allowed us to get on the property ladder much sooner than we hoped, saving us money rather than paying rent and allowing my boyfriend to save some money so when we buy again in a few years we can hopefully have equal equity!

frugalsmurf

If she's apprehensive could she see it as "your 50k" and you get legal papers drawn up to protect your 50k.?

Mojisola

theoallen wrote: »

My dad has offered to gift me £50,000 for a deposit which is great. My girlfriend doesn't really get on with him however and is slightly apprehensive about it not wanting to be in his debt (not financially, as its a gift, but obviously we'd owe him something for being so nice).

Is her apprehension based on experience - either of your father or someone else in her life?

Will your father interfere in decisions you make about the house because he has given you the deposit?

megaginge

To answer the other question, if you borrow 4x your joint salary you'd be looking at 260, plus that 50k is a 310k property, give or take.

You might be able to push for 4.5x salary but do you really 'want' to do that ,and would you meet affordability ...

https://www.moneysavingexpert.com/mortgages/best-buys/?page=results&pageNumber=1&mortgagetype=FIRST_TIME_BUYER&amountborrow=260%2C000&propertyworth=310%2C000&repayyears=25&producttype%5B%5D=FIXED&banks_filter=&providerFilter%5Bbank%5D%5B%5D=-1&building_societies_filter=&providerFilter%5Bbuilding_societies%5D%5B%5D=-1&productlength%5B%5D=5&productlength%5B%5D=10&productlength%5B%5D=-1&resultsOrder=MonthlyPayment

You'd be looking at 1200 pm for the mortgage alone, for 5 years. Raising then to 1400...

Consider your other bills, if you live at home now do you pay for food, gas, electric, water, tv and internet, phone, if a flat service charges and ground rent, if freehold you'll want a house maintenance fund. If you've got car finance remember the cost of that too...

But keeping below 85% LTV would be a good position to be in, which you are with his 50k