Mortgage large deposit first time buyer

jonney92

Hello,

I am looking at a property in the region of £200k.

My dad is going to help with a gifted deposit of around £100k.

Or would it be easier for mortgage purposes if we just said he owns 50% of the house then I just take out a £100k mortgage?

Which would be best way to do this?

Many thanks

wesleyad

Assuming he already has a house?

If so then he would get hit by the higher stamp duty which on 200k would be an extra 6K. So I doubt that would be a good option.

foxy-stoat

I wouldn't try and over think it or complicate things, he is gifting you £100K - its going to be your house and your mortgage and he will have no financial interest in the property.

jonney92

wesleyad wrote: »

Assuming he already has a house?

If so then he would get hit by the higher stamp duty which on 200k would be an extra 6K. So I doubt that would be a good option.

Hello Wesley,

Thank you for your reply, yes my father already owns the current house he lives in.

Do banks mind the amount you use as a gifted deposit?

Regards

wesleyad

jonney92 wrote: »

Do banks mind the amount you use as a gifted deposit?

Regards

I'd speak to a broker and explain, see what they can do. My gut says, yes there may be a problem, as you have to convince the bank he is genuinely gifting it, and not loaning it, and as the numbers get higher I assume that gets harder. But that's not based on any evidence!

jonney92

wesleyad wrote: »

I'd speak to a broker and explain, see what they can do. My gut says, yes there may be a problem, as you have to convince the bank he is genuinely gifting it, and not loaning it, and as the numbers get higher I assume that gets harder. But that's not based on any evidence!

Yes I have seen they need a written letter from solicitor to say they have no interest in the property and it is just a gift.

Thank you for your help will speak to a broker and see what they recommend.

ACG

Is he gifting you the deposit or buying the house with you?
It is easier to do a gift that a joint purchase with your dad but both are possible. It just depends on what you are actually doing.

Exodi

You will also likely have the same issue that another current thread has (albeit completely different circumstances). If you do intend to take the remaining £100,000 out as a mortgage.

The lender may take issue with the fact your entire deposit is gifted and you've essentially not saved a single penny for the mortgage.

From assessing affordability and expenditure (and assuming what you've said is exact) it would suggest you take in and pay out the same amount each month with no flexibility.

Of course you may have £10,000 to the side that you want to use for furnishing the house.

jonney92

Exodi wrote: »

You will also likely have the same issue that another current thread has (albeit completely different circumstances). If you do intend to take the remaining £100,000 out as a mortgage.

The lender may take issue with the fact your entire deposit is gifted and you've essentially not saved a single penny for the mortgage.

From assessing affordability and expenditure (and assuming what you've said is exact) it would suggest you take in and pay out the same amount each month with no flexibility.

Of course you may have £10,000 to the side that you want to use for furnishing the house.

Hello Exodi,

Yes this is understandble but I also have saving in other accounts which I can show around £20k. This was saved mainly for furnishing and other fees.

somethingcorporate

jonney92 wrote: »

Hello Exodi,

Yes this is understandble but I also have saving in other accounts which I can show around £20k. This was saved mainly for furnishing and other fees.

In this case the obvious thing would be to take £80k as gifted, use your own £20k to add to the £100k deposit and then use the other £20k from your dad for the fees/furnishings etc.