Parents gifting a deposit that THEY borrowed

Brady89

Hi everyone,

I have question that I don’t seem to be able to get a definitive answer for. I’ve seen a house I like, sale price is £116000. I have a 10% deposit (£11600), and nationwide have said they can lend me £101000, so this leaves me just £3400 short. I’ve spoken to mum and she said she would be happy to take a loan for that amount (or pay it on her credit card) and give it to me as a gift and pay the loan back herself. It would definitely be a gift,she doesn’t expect or want me to pay it back and she doesn’t want any claim on the property.

My question is... is the bank going to be ok with me using this money as a deposit? I understand that you are not allowed to borrow money yourself to go towards a deposit, but as it is a gift and doesn’t have to be repayed by me personally and doesn’t affect my affordability will the lenders be ok with it?

Any advice will be greatly appreciated thank you

ViolaLass

Or don't offer the asking price. If you can get it for less than £112600, problem solved.

Brady89

They’ve already reduced it from £130000. It’s well under market value. They said they can’t go any lower than 116000 or they won’t be able to afford the property they want to move to

amnblog

The Nationwide Confirmation of Gifted Deposit form should be sufficient to deal with this gift.

ACG

I would double check with the solicitor what documents they would ask for in regards to the gift. Some may want a bank statement and if they see a loan come in and then get paid out to yourself, they may decide to tell Nationwide. They may or may not have an issue with it.

Alternatively, you could ask Nationwide generically - ie as a new customer.

davidmcn

It would need to be an over-eager solicitor who decides to make an issue out of the gift being derived from a loan - there's no requirement for them to disclose it under lenders' standard instructions.

ACG

I would rather know if the solicitor is over eager now rather than in a month or two.

davidmcn

ACG wrote: »

I would rather know if the solicitor is over eager now rather than in a month or two.

Agreed - I think there have been some example(s) posted about here in the past.

Thrugelmir

The source of £3,400 is unlikely to cause concern to the lender.

sammyjammy

How are you going to pay all the fees?

Brady89

The money for disbursement’s and survey etc is already with my solicitor. My mother works for the solicitors firm I’m using so fortunately my solicitor has said she will wave her fee which is kind of her. What originally happened was I went to see a mortgage advisor who told me that he could get me up to £116000 so I thought ok great and made an offer on the property. Then when we started moving forward he contacted me and told me he could only get me £86000 lol he said he had misheard what I told him my earnings were over the phone, he only thought I was earning £4000 more than what I actually am. It’s amazing to me that £4000 less per year would make such a difference. So I contacted nationwide over the phone and they said they could get me £101000 which leaves me the £3400 short. I have an appointment there Thursday so I’ll see what they say. If they are not happy with the source of the other £3400 then I’ll have to contact the estate agent and pull out. I’ll give my solicitor a call Monday and see what she thinks. Fingers crossed