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Gifted Deposit Loan

edited 30 November -1 at 1:00AM in House Buying, Renting & Selling
6 replies 733 views
markfjmarkfj Forumite
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edited 30 November -1 at 1:00AM in House Buying, Renting & Selling
Hi.

Just a quick question please

I am hoping to buy a house with my partner,

My brother and mum have both taken out a loan to help with the deposit needed .

They are willing to fill in the form that its a gift and not a loan and they have no interest financially in the house.

The broker wants all the details of the gifters and to see their bank statement for a month, which makes sense

I'm just abit concerned that they may not lend based on seeing the 2 loans which is part of the deposit (they are giving me money they have saved too)

I am trying to do everything by the book, I just wondered if it's not A loan in my name and they confirm there's no financial interest from them in the house if that's acceptable ?

Replies

  • da_ruleda_rule Forumite
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    In my experience, as long as the person making the gift has come into the money lawfully then that is all the banks are concerned about. A loan is a perfectly lawful way to obtain money.

    If they sign the declaration stating the money is a gift and they have no interest in the property then you should be ok.
  • CouldsavemoreCouldsavemore Forumite
    104 posts
    100 Posts
    My parents 'gifted' my deposit.
    All that was asked for was a letter stating it was a 'gift'.
    My mortgage went through ok. This was 5 years ago, so after all the big changes about how they calculate it etc
    Mortgage overpayment target is £1200
    Total paid 1413 :T;)


    SPC #80... Still adding that loose change.:p
    2019 mortgagr free #48 Target £2400 paid £:645beer:
  • seven-day-weekendseven-day-weekend Forumite
    36.4K posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
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    We also signed to say the money we gave our son was indeed a gift. No problem at all. (2012).
    (AKA HRH_MUngo)
    Member #10 of £2 savers club
    Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton
  • davidmcndavidmcn Forumite
    16.8K posts
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    This has come up here before and I think someone had encountered difficulty. Strictly speaking it should be fine, but if your family can't actually afford the gift without getting a loan that might lead to suspicion that you're going to be reimbursing them the repayments. If the broker is aware and thinks it's fine for your lender then you're probably good.

    Also be aware that your solicitor will want to see evidence of where the money has come from and ID for your parents. The fact it's from a loan shouldn't be an issue for compliance with anti-money-laundering regulations, but best to be upfront with them in case they cause a last minute delay by checking with the lender that they're aware of where the funds have come from (lenders often don't bother mentioning in their instructions to the solicitor that they've already OKed the gifted deposit).
  • edited 13 October 2018 at 11:52AM
    markfjmarkfj Forumite
    519 posts
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    edited 13 October 2018 at 11:52AM
    Thank you for you replies

    To be honest the situation become this complicated after putting and offer and and getting acceptance as my partner's step mum and dad were going to gift us money and then last minute said they wouldn't which wasn't helpful

    My brother and mum said they would take the.loans out.

    I'm morally obliged to pay them back but not.legally , that why I asked the question really. I'll speak with my broker when I can as this has only just come up and see what she says but appreciate the views so far

    Thanks
  • markfjmarkfj Forumite
    519 posts
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    Just an update, the the broker called me back and said they dont see it as a problem, if the loans arent in my name and they fill in the gift forms, but will confirm with the lender on monday morning

    hopefully was me worrying unnecessarily but rather safe than sorry

    Thanks again for your views

    Mark
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