Deposit help

Snakes

Hi all,

I’m looking for a bit of advice.

I am currently looking at buying my first home with my partner, but the mortgage will be in my name due to her circumstances. We was looking at the option of my partner taking out a loan of £6000 and putting this in my account toward the house deposit/ costs. We would then look to get something put in writing to say if we split up she would get this money back…

My questions is does this have any impact on me getting a mortgage? Are the mortgage lenders interested in where the deposit comes from? Do I need to consider anything else with this?

The £6000 would mean I can put more than a 10% deposit down.

Any thoughts or advice would be a great help.

Regards,

Sam

[Deleted User]

You'll struggle to find a lender who'll accepted a borrowed deposit.

G_M

It's fairly straihtforwrd for you to draw something up showing you've received a loan of £6K. You should also include how/when it will be repair, taking into account various future scenarios including you splitting up.

This latter is potentially difficult. If it happened after, say 3 years, could you afford to repay the loan? Would you have to sell the house? Nasty to consider, but better to think it through together rationally now than add to the fall-out of a break-up later.....

A mortgage lender will not like a loan. It reduces your ability to afford their loan, so they'll take it into account.

The alternative is to make it a gift, but then if you do break up later, she'll be seriously out of pocket!

As a aside, is she going to contribute to mortgage payments? Or contribute to the property in other ways? She might gain some property rights in that case, and even if not, again if you split up she may begrudge the contributions she's made to your long-term property.

Pixie5740

Have you spoken with a mortgage broker? Are you certain that your partner cannot have a joint mortgage with you? I imagine a lot of lenders will have an issue with someone providing the deposit, living in the property but not being named on the mortgage.

Snakes

Hello,

Many thanks for the response.

I’m guessing putting it down as a gift would be the best way to go. How would this work ?

Pixie5740

That won't necessarily help because, presumably, your partner will be living in the property too. I ask again have you spoken with a mortgage broker yet? I can see you have several threads about buying a home and several times it has been suggested you engage a mortgage broker.

Snakes

Hi,

Thanks for the reply.

Yes I have spoken to a mortgage broker and she can’t go on the mortgage.

She will be living with me, but I don’t have a problem with her being entitled to some of the house.

I was hoping she could give me the £6000 as a gift and it wouldn’t make a difference but it sounds a bit more complicated L. I know people get help from parents and I thought it would be a bit like this.

Really appreciate the help

Regards

Sam

Pixie5740

If you've spoken to a mortgage broker then ask him/her about your partner gifting a deposit and living in the property.

You might not have an issue with your partner having a beneficial interest in the property but a number of lenders will.

Snakes

thanks for the reply

gembert83

Most mortgage lenders are happy with someone over the age of 18 residing in the property with the borrower as long as they sign a consent to mortgage/a waiver as to their rights in the property, basically meaning that they would move out if the property were repossessed and that any interest they were potentially to claim they had came after that of the lenders.


They would not however be happy to proceed with a loan from that person unless it was specifically stated to be a gift. I usually supply lenders with a generic letter of gift (save for some lenders like HSBC who require certain wording). They are along the lines of I XXXX am gifting a sum of £XXX to XXXX. I do not expect these monies to be repaid nor will I have any legal or equitable interest in the property.


This happens quite often with the bank of mum and dad providing monies towards a purchase.

cooltt

Snakes wrote: »

Hi all,

I’m looking for a bit of advice.

I am currently looking at buying my first home with my partner, but the mortgage will be in my name due to her circumstances. We was looking at the option of my partner taking out a loan of £6000 and putting this in my account toward the house deposit/ costs. We would then look to get something put in writing to say if we split up she would get this money back…

My questions is does this have any impact on me getting a mortgage? Are the mortgage lenders interested in where the deposit comes from? Do I need to consider anything else with this?

The £6000 would mean I can put more than a 10% deposit down.

Any thoughts or advice would be a great help.

Regards,

Sam

Hi Sam
Unfortunately some rather naff advice so far.

You are the sole applicant so unless the cash in your account is obviously from dubious sources or is an unusually large amount then it will not be questioned.

Many people "borrow" a deposit from family, friends, whoever. If a family member gives it to you even better. The origin of your 6k (which is peanuts in terms of a mortgage deposit) will be of little interest to the lender. All a lender cares about is your ability to repay and what you tell them matches your credit file.

Contrary to popular hysterics around the new lending rules, lenders have no absolute lawful right to demand to know the origins of the funds in your account. Only those carrying out criminal investigation involving ill gotten gains can demand this.

Bottom line is IF asked, tell the truth the money is a gift and you are the sole applicant.

As for your other query about splitting up, write it on a piece of A4 paper what happens to the house, you sign it, your girlfriend signs it, a witness signs it. That is now a legally enforceable contract. If it makes you feel better get it done by a solicitor but for the purposes of legality its not necessary.