Gifted Money

chrippy

Hi,

We have had a offer accepted on a house that we are buying in full without a mortgage with help from parents.

They have taken out a unencumbered mortgage to raise the funds gifting it to us and don't want repaying. Their mortgage has been approved by the Halifax and their house valuation came back fine now it has gone for final credit check with a solicitor and this could take up to 6 weeks.

Now as the house we are buying is moving quite quickly if the money isn't released in time could they borrow the £65.000 needed from a family friend pass and it on to us?

Would this be a problem with our conveyancer to pass our own credit checks?

kingstreet

chrippy wrote: »

Hi,

We have had a offer accepted on a house that we are buying in full without a mortgage with help from parents.

They have taken out a unencumbered mortgage to raise the funds gifting it to us and don't want repaying. Their mortgage has been approved by the Halifax and their house valuation came back fine now it has gone for final credit check with a solicitor and this could take up to 6 weeks.

Now as the house we are buying is moving quite quickly if the money isn't released in time could they borrow the £65.000 needed from a family friend pass and it on to us?

Would this be a problem with our conveyancer to pass our own credit checks?

What credit checks?

Party A is borrowing from a lender and that may not be fast enough, so they might need a gift from Party B so you can complete faster?

Sorry, this is one you are going to have to ask your conveyancer.

da_rule

I don't think you're using the correct terminology.

However, from my interpretation of your situation, your parents borrowing the money from someone else could cause a number of issues.

Firstly, if they are gifting you the money they will have to prove the source of the funds in order to pass the conveyancers money laundering checks. When this money has come from a mortgage lender this is relatively simple, when they themselves have received the money as a gift or an unregulated loan it becomes more complex.

Also, if they pay the money into their account and then transfer it out it may make leave a mark in their credit file which may lead to Halifax asking further questions if they run a last minute check.

davidmcn

chrippy wrote: »

Would this be a problem with our conveyancer

A bit of a headache but yes as long as there's a paper trail showing where the money has ultimately come from and ID for everyone involved it's possible.

But is this family friend really just going to hand over £65k without getting any security in return?

It would be much easier either to make your purchase move more slowly or to speed up your parents' remortgage.

Red-Squirrel_2

You're letting your parents put themselves in £65,000 in debt to buy you a house?

Have I read that right?

Aspiration

Red- Squirrel, As a majority of parents would for their child if they could afford to?

Re the above if you're not getting a mortgage and paying completely in cash then there should be no issues as it is your money and no lender to satisfy.

However, there has been good advice above that the conveyancer will need to see where proof of funds have come from (probably the person who lends to your parents and how they've built up or got the money) and I would expect that they would want some form of loan contract written up or security.

In truth, I would be surprised if it took six weeks to release the money from your parents house and would continue as is and hopefully will come through quickly.

chrippy

Sorry it was a little confusing. Thanks for all your thoughts I think like a few people said we will just wait it out as it will be easier in the end.

Aylesbury_Duck

Aspiration wrote: »

Red- Squirrel, As a majority of parents would for their child if they could afford to?

Not really. If parents had £65k available to help a child on the property ladder, many would because they could afford it. Going into debt of that amount for that purpose is not something the majority would do.

Lioness_Twinkletoes

Aspiration wrote: »

Red- Squirrel, As a majority of parents would for their child if they could afford to?

If they are borrowing the money they can't afford to.

csgohan4

Aylesbury_Duck wrote: »

Not really. If parents had £65k available to help a child on the property ladder, many would because they could afford it. Going into debt of that amount for that purpose is not something the majority would do.

for a deposit maybe, but that's a lot of debt to swallow.


Money and family should never mix, is your relationship worth over some trees?

Red-Squirrel_2

Aspiration wrote: »

Red- Squirrel, As a majority of parents would for their child if they could afford to?

If they could afford to they wouldn't need to get into debt to do it.