Using child savings

DBoy1

Hi all,
My wife and I have a deposit together for a house and an extra £5k to cover fees and stamp duty.
However we have just seen a house that is perfect for us, and it is slightly more expensive than we originally planned for, and it looks like we can't get the price down enough.
Our mortgage promise easily covers the amount that we would need to borrow. However the increased house price means that we need a bit more deposit. If we saved this, it would take another 2 to 3 months, by which time the house might have been snapped up.
We have a nationwide passbook savings account, with just under £10k balance, which is intended for our son. We last deposited into this account about a year ago. We have a passbook that says " DBoy1 ON BEHALF OF Dboy1 Junior". We also have the annual account statements, which are just addressed to me (no mention of our son at all).
So, if I were to shift the £5k fees that we saved into our deposit "pot", could we then dip into our child's savings to cover the shortfall of stamp duty and other costs? Of course, we would be intending on putting the money back with interest, within a reasonable amount of time.
The new house is right next door to a good school, a park, a good neighbourhood, and the house itself would be a great environment to grow up in... so it is also for my son's benefit. I appreciate that a few members might have issue with the idea of borrowing our child's money, but putting that aside, would it be possible? Just thinking of the need to prove where the money came from, and the passbook saying "ON BEHALF OF....", and of course the child not being named on the deeds/mortgage.
Any input please?

Andypandyboy

If you put all the money in there I see no reason not to juggle about as needed, with the intention to repay it when convenient.

If it is money left to him from another source then I don't think it appropriate, but if it is vital to improve the quality of family life then it may be something you have to consider.

The bank or whoever will just ask if it is for the benefit of.......

DigForVictory

Me, I quite deliberately borrow from my sons rather than the bank.

I pay them back a better rate of interest, but it's there, it'd for their benefit - and I intend not to just repay it but repay it & add a chunk.

So long as you can afford the mortgage & gradually the repayments (Set yourself a time frame, then start overpaying the mortgage?) then no question - got for it!

HiToAll

of course you can steal from your childs account to pay for a house you cannot afford.

MortgageMamma

My take on this is that if it is only a temporary borrow it should be ok. Financial security and stability NOW is more important to your sons upbringing than 10k in the bank that he can't spend anyway. You have to do what is best for your family unit as a whole, as the late Leonard Nimoy would say "the needs of the many must outweigh the needs of the few, or one".

HiToAll

DBoy1

Thanks for replies.
Just to clarify that the house price is just over 50% of what the bank is willing to lend from the DIP, so it's definitely affordable. The issue is that right now we don't quite have the required deposit. We would have it in a max of 3 months, but will the same house be available then?
The mortgage repayments would be about 25% of net income, so affordability really isn't an issue.
We will continue to have a think about it, as I do have some reservations of borrowing his money for this.

Andypandyboy

HiToAll wrote: »

of course you can steal from your childs account to pay for a house you cannot afford.

If they put the money there how are they stealing?

kingstreet

If you present statements or pages from your kids' accounts as part of your evidence of deposit, this will be rejected.

A minor cannot gift funds to the parent for obvious reasons, so such action is usually best avoided.

DBoy1

If you present statements or pages from your kids' accounts as part of your evidence of deposit, this will be rejected.

That's really useful, thank you.
Does this also apply to stamp duty and legal fees?
Even if we go for the more expensive house, the entire deposit is in our own account and has been saved up, without any help from anyone.
The help would be needed to cover stamp duty etc... but then again how could we really separate them?
Probably best to wait a bit.

HappyMJ

DBoy1 wrote: »

That's really useful, thank you.
Does this also apply to stamp duty and legal fees?
Even if we go for the more expensive house, the entire deposit is in our own account and has been saved up, without any help from anyone.
The help would be needed to cover stamp duty etc... but then again how could we really separate them?
Probably best to wait a bit.

If the account is in your name you might be able to use it. If it's just a small sum then I'd use it to furnish your son's room therefore benefiting him....i.e new carpet, new paint, wallpaper etc...

I would make the offer on the house now and save as much as possible over the next 3 months. You do not need all the money today you need all the money on the day of completion.

I would over the next 3 months use your credit card to pay for as much as possible so you have cash savings.