Parents Property, Gift or Buy

H0VIS

Hi

I would like to buy one of my parents properties, its been valued at 350k.

The problem is my credit rating is not great - "fair". I can put 50k down as deposit.

Would it be possible for my parent to gift me the property and for me to take out a mortgage straight away for 300k? I hear that most lenders will not do it for 6 months?

Would really appreciate any advice.

Kind Regards

Thrugelmir

H0VIS wrote: »

The problem is my credit rating is not great - "fair".

Without knowing the cause of your rating only being fair difficult to comment on the likelihood of your application being successful.

Is a mortgage of £300k within the bounds of affordability. That's another question.

Will your parents incur a tax liability in selling this property? As you suggest that they own more than one.

getmore4less

What are you going to do with the £300k?

ViolaLass

H0VIS wrote: »

Hi

I would like to buy one of my parents properties, its been valued at 350k.

The problem is my credit rating is not great - "fair". I can put 50k down as deposit.

Would it be possible for my parent to gift me the property and for me to take out a mortgage straight away for 300k? I hear that most lenders will not do it for 6 months?

Would really appreciate any advice.

Kind Regards

Assuming you'd be giving them the £300k, how would this be different to just buying the property from them?

H0VIS

Hi

Thanks for the reply

I earn about 90k - after tax, so think my earning are ok to cover 300k.

Not sure about my parents tax situation.

The 300k would be going to them to buy the house.

I assume I would get a mortgage (or a better deal) if I had the house gifted to me first, as it would be an asset - rather than just trying for a mortgage to buy it, before I own it. Mortgage vs Re-mortgage.

ViolaLass

H0VIS wrote: »

I assume I would get a mortgage (or a better deal) if I had the house gifted to me first, as it would be an asset - rather than just trying for a mortgage to buy it, before I own it. Mortgage vs Re-mortgage.

Makes zero difference to the bank.

Pixie5740

It would be easier to arrange a mortgage with a £50k gifted deposit than for your parents to gift you the entire property and then trying to get a mortgage.

AnotherJoe

Why do you have a poor credit rating when you earn£90k?
Are your parents able to wait ? Could you fix your credit situation over say the next year and then buy Ina years time with the gifted £50k?

amnblog

There is a massive difference between them gifting it to you and your buying it.

What is the objective here?

getmore4less

you have a few issues to consider.

CGT assessment for parents on disposal(gift or buy)
SDLT with connected transactions with gift house and gift of cash or a buy
IHT with a PET and a subsequent gift back.


If they don't need the cash in a hurry they could become your lender.

£90k should cover some decent monthly payments