Gifted deposit from mum who might move in?

JaneyLouWho

Hi all - not been around for a while as the vendors of the property we loved and had an offer accepted on have ghosted us, not returning our calls or progressing with the sale. We are disappointed but things have changed a bit in terms of our circumstances and I wanted some advice. My mum is also looking to move, to downsize, and we've seen a property that would accomodate both our family and her - not an annexe as such but she'd have a seperate 'side' of the house. She would put 33% of the house price down as a deposit from the sale of her house, and we would put in 7% and get a mortgage for the rest. However, the lender we were using for the previous property says that mum would have to go on the mortgage with us, meaning they could only offer us terms until she's 75 (13 years away). That makes the repayments too high. Are there lenders who would accept a 'gifted deposit' in this form with the gifter also living in the property after the purchase? Or is it a non-starter?

Keep_pedalling

I hope this would not be a gifted deposit as your mother needs to retain ownership of her share of the house, for her own security. If she gifts it to you she could find herself homeless if you ran into financial difficulty through unemployment, illness or divorce. The same could happen if you died before her.

She should take independent financial advice before making a decision like this.

JaneyLouWho

Thanks, and yes absolutely she'd get advice of her own before either of us agreed to such a big commitment. We will not take advantage of her situation.

Any thoughts on my original question would be appreciated.

enthusiasticsaver

You might want to consult a mortgage broker who may have more idea which lenders will consider your scenario. The straightforward way is for your mum to just gift the money but not have her name on the deeds. This opens her up to issues though if for any reason the house was repossessed or was part of a divorce settlement so not to be taken lightly. It might also be worth consulting a solicitor to see if some sort of deed can be drawn up registering your mums interest but a lot of lenders won't like that.

Thrugelmir

JaneyLouWho wrote: »

Are there lenders who would accept a 'gifted deposit' in this form with the gifter also living in the property after the purchase? Or is it a non-starter?

The complication is that your mother has a financial interest in the property. Legally this creates a problem for the lender. As this pre-empts any validity of a gift letter.

csgohan4

tread carefully, do you really want your mum staying with you, privacy, her way of doing things e.t.c.


Also as said before, money and family should never mix.

JaneyLouWho

I appreciate everyone's concern for whether 3 generations living together would be right for us all. We are all giving this thorough, independent and careful thought.

What I'd really like is advice about the mortgage and legal practicalities. Does anyone know of a lender that will allow someone to put part of the deposit down on a house, and live in it without being named on the mortgage, or one that will allow this with a higher age cut off than 75?

Pixie5740

No, that's what you need a mortgage broker for. Do not attempt to DIY this application.

JaneyLouWho

Went to a broker and they've advised me of two high street lenders who would offer, subject to credit scoring - woohoo! Now to start the whole nail biting process again...