Parents gifting deposit and living in property

JAPETH

I am currently going through a mortgage application with Virgin Money as the sole applicant. My parents are gifting me £280k from sale of a property (not their main home). They aren't expecting me to pay it back or have legal interest in the property. However the gifted deposit form my parents have to sign asks whether at some point in the future they will intend to live in the property.

We aren't sure what to put down as they won't be living with me immediately as they both work (self-employed) and have their own home. They plan to retire in the next few years and we have talked about them coming to live with me as a possible option as it is nearer to our wider family.

What do I say? As the immediate term they won't be there but eventually they may end up living with me. Will the lender refuse a mortgage because in the future I may have elderly parents living with me and see them as dependents.

Thanks.

enthusiasticsaver

If they will not be living with you immediately I see no reason for you to tick the box. The box is there as your parents may be seen as having a vested interest in the property if they are gifting money towards it and living there. If they will not be living there and they have another home elsewhere then you could quite reasonably say they are not going to be living there. No one knows what will happen in the next few years. Presumably if they did come and live with you they would not be dependant on you as they would have the sale proceeds of their main home?

Thrugelmir

JAPETH wrote: »

However the gifted deposit form my parents have to sign asks whether at some point in the future they will intend to live in the property.

Then you need to answer yes. As they may do.

Your application will be considered in line with Virgin's internal policy on gifted deposits.

The form also subsequently says :-

I/We understand that giving false information about this gift may be mortgage fraud.

Data is shared between CML members through an organisation called National Hunter.

http://www.nhunter.co.uk/

Thrugelmir

enthusiasticsaver wrote: »

If they will not be living with you immediately I see no reason for you to tick the box.

That's not the question being asked.

The question before says.

I/We do not intend to live in the Property at any time in the future.

Declarations leave no ambiguity.

minimike2

Agreed with Thrugelmir.

The current situation is that they intend to live with you in the future. Therefore the answer to the question is quite clearly "yes".

Did you use a broker for this application?

Mortgage_Adviser

Japeth,
This is exactly one of the reasons why many people would use brokers novadays.
The lenders will often have quiet some grey area in their policy so presenting the same case to the lender (Btw in both cases compliantly) from a different angle can make a difference between accept and decline.
The brokers have experience in this whether the general Joe Public would not.
So my suggestion always where possible use the brokers as the broker would've been able to overcome this matter for you when now you struggle on your own.

JAPETH

Thanks for all your help.

I am using a broker and I am finding out they aren't actually any good...

So I ticked yes that 'at some point in the future' the will be living in the property and Virgin came back today to ask me to explain what I meant. So I explained as above that it was a possibility they will live with me when they retire.

Also my confidence in Virgin shaken a bit today. They were asking why my gifted deposit was more than what I required. Apparently a computer glitch showed I was asking for £250k mortgage and not £205k.....

Thrugelmir

JAPETH wrote: »

I am using a broker and I am finding out they aren't actually any good...

In what way are they failing you?

JAPETH

At a basic level they should have known my AIP and subsequent application was for £205k not for £250k hence why my deposit is the amount it is. Didn't really need to wait for me confirm or explain as we went through the figures assume its all there on my file. It was an error on Virgin's part which is worrying.

I know they might have lots of clients but is it wrong of me to ask them to have some basic overview of my application?

TrickyDicky101

I disagree that you would be being dishonest if you said there was no intention - talking about it is different to intent. It's a possibility from the sounds of it - according to my dictionary that ain't intent (ie so they do not 'intend to live in the property').

davidmcn

TrickyDicky101 wrote: »

I disagree that you would be being dishonest if you said there was no intention - talking about it is different to intent. It's a possibility from the sounds of it - according to my dictionary that ain't intent (ie so they do not 'intend to live in the property').

Yes, I suppose the question really means "are they giving you this money expecting that in return you'll let them live in this property". If it's just a vague possible future option and they'd be gifting you the money anyway then I don't think it needs declaring.

(in the same way that a gift doesn't become a loan just because you might be making gifts in the opposite direction at some point in the future)