Mortgaging a property already owned to gift

Jaywood89

Hi guys back again.

Just after som advice for a family member. If anyone has seen a post of mine before they will know I’ve had a headache securing a mortgage for my property. To cut a long story short I managed to get approved but fell short £46k on the final offer (bummer!) well my father came to my aid and offered to gift me the missing amount. Now! Technically this is money I’m already owed but hadn’t perused due to having to take legal action blah blah blah. Essentially the £46k is half of what was left to me by my mother for her half of my parents house. (Yes she left to me and not him....family is complicated) this offer from him was his way of ‘buying me out’ and I’d rather take that than fight him over the house.

So with the background out of the way....my question. My dad has most of the £46k in savings but would rather mortgage the house for £50k as it’s mortfsgr free and worth £300k, he wishes to sell and downsize hence the giving me the money so he can sell and move. But selling the house will take time which I don’t have I’m afraid. So my dad approached Santander (previous mortgage company) who gave him an AIP. Problem is I know he has had bad credit over the years and had a ccj for a parking fine he wasn’t aware of but settled in November last year. I’m worried that when it comes to it they will decline him. He hasn’t applied for a mortgage in 30 odd years and my mom dealt with the finance anyway so he’s a novice really. Can I ask what do people think his chances are and what other options are there about? He has £35k secured loan which he’s been paying for 12 years and thankfully has always paid. He’s 56 and earns around £40k per year.

Any advice or view points are appreciated. Just want to get an outside perspective.

Thanks in advance guys

foxy-stoat

Short version, can your Dad (56) withdraw equity from his property and gift it to you.

He will be taking out a 16% LTV mortgage for what 10 years - so I would suggest he will have no problem getting the mortgage based on the information you have given. Just get him to fix it for the least time or with zero exit fees as when he sells the property he will not want to pay early repayment fees.

Only sticking point may be is the reason for the equity release - and if your lender is ok with gifted deposits.

Jaywood89

Thanks for the reply. I think they said 15 years to him m, but I didn’t check the repayment charge I will call him and double check that.

He told Santander what the money was for. From what I gathered that IS the thing he’s worried about. I suppose it’s all down the the underwriters really. I imagine there are alternative lenders out there if it is an issue? I think if it comes back as a no I will ask him to use a broker as otherwise we are just swinging a bat in the dark hoping to hit something