Parent taking a loan which I will pay back

Sly1988

Hi,

Just looking for some advice. We have our deposit ready and agreement in principle to buy a property. We are short on the stamp duty due to my partner owning a place and the recent increase in stamp duty for 2nd homes (I am a first time buyer, he is not). The stamp duty would be £6000 if I was buying on my own but is now £15,000. My parents have offered to take out a loan on my behalf so as not to affect my credit rating so close to the house sale going through and I will pay them back monthly. Is there any problem with this?

[Deleted User]

According to the terms of your lender, you'll need to declare it to them. It may change the affordability assessment.

missbiggles1

I could see some very big problems for your parents, I'm afraid. If you can't afford to save this extra money, how are you going to be able to afford to pay them back?

Sly1988

Thanks for your feedback. We have saved 33,000 for deposit. Due to increase in stamp duty in April this year, we now must pay 9000 more hence the gap we now have to look for. We would of course wait and save but the process for buying the house started prior to the increase in stamp duty so we are trying to find a way of still going through with the sale.

Gaz83

Sly1988 wrote: »

Thanks for your feedback. We have saved 33,000 for deposit. Due to increase in stamp duty in April this year, we now must pay 9000 more hence the gap we now have to look for. We would of course wait and save but the process for buying the house started prior to the increase in stamp duty so we are trying to find a way of still going through with the sale.

You will need to inform the lender what your repayments will be each month. As mentioned above this may change their offer to you, based on affordability.

tidds

Would you be able to have a discussion with your parents and ask if this could be a gift? Legally if this is a loan from your parents then it will need to be declared, if it's a gift and your parents consider it so (regardless of any other agreement you make with them in the future after all the 'dust has settled') including writing a letter to express so, that could work..

alexadams88

Just declare it if it's a loan, or you might try talking to your parents to give it to you for free or a gift.