Gifted deposit for buy to let

Hannah_kr7

Ok, so I sell houses for a living (for my sins) but today I came across a real issue.... I sold my home 4 years ago and have moved in with my now fianc! who has a farm and therefore a property which I now live in. I decided it best that I get myself a mortgage so I still have a property in my name so agreed to buy a flat near where I work (an hour away from home). 50% of the deposit is being gifted to me by my fianc!, the rest I already have. The flat is £170k and would rent for £800 so good return. Today the mortgage company have refused to accept my case as they do not believe the deposit is gifted (even though my fianc! signed a gifted deposit form) and they also think I am buying it to live in as it’s so close to my work. Does anyone know another mortgage company (NOT precise) that will lend 75% on a new build property under these circumstances? It seems totally unfair. They are basing their decision on assumptions and not facts. TIA

AdrianC

You "sell houses for a living" = estate agent... and you don't know any mortgage brokers?

£21k is a generous gift. I'm not surprised they're a little suspicious, especially given relative locations - you can see why they might be thinking "pied-a-terre".

G_M

Hannah_kr7 wrote: »

Ok, so I sell houses for a living (for my sins).............. Does anyone know another mortgage company (NOT precise) that will lend 75% on a new build property under these circumstances?

Ask one of your colleagues? Or contacts in the mortgage business?


But given that you and fiance are contributing equally, why not make this a joint business venture? Joint purchase, joint mortgage,joint tenancy.

silvercar

G_M wrote: »

Ask one of your colleagues? Or contacts in the mortgage business?


But given that you and fiance are contributing equally, why not make this a joint business venture? Joint purchase, joint mortgage,joint tenancy.

I'm guessing to avoid 3% stamp duty penalty as the fiance already owns a property.

Hannah_kr7

Thank you for your replies. I am already using a broker who told me they would be fine about the deposit, then I paid his fee and now they aren’t happy with his deposit. He seems to have come to a dead end now. And I don’t want to buy it with him, firstly because I’m hoping this will aid towards my income when we have children and secondly because it’ll cost an extra £5000 stamp duty when we don’t need to pay that.

Hannah_kr7

Also, the broker said we’ll do a residential mortgage then and they said they won’t do that as I might let it! Surely they can’t have it both ways??

theartfullodger

Hannah_kr7 wrote: »

......................I am already using a broker who told me they would be fine about the deposit, then I paid his fee and now they aren’t happy with his deposit. ,,,,,,,,,,,,,,,,

So another salesman (you sell properties..) was slight less than 100% honest: You are presumably not surprised.



I'd take the same view as the lender: Your "plan" sounds like it's arranged to avoid tax, if so so unpatriotic...

AdrianC

Your broker sounds like an idiot. Or there's some serious Chinese Whispers going on. Neither are great, given that you're an EA, tbh...

Yes, of course you'll need a BtL mortgage for the property you're buying to let. This should not be a surprise to you. There's a clue in there somewhere. If your broker has already hawked your details around as looking for a residential mortgage, that won't help one bit with the suspicions that you might be planning to live there.

As for the "gifted" deposit... If the main reason to put it in your sole name is SDLT evasion (the "income in my name" thing is an excuse, unless you're also thinking of Income Tax evasion), then again you can see why they might be looking askance at the claims that it's an absolutely unreserved gift... Especially if your personal finances as a couple are so separated that you believe you need income in your name once you aren't working...

Hannah_kr7

Ok there’s no reason to be rude. Not all estate agents are liars or dishonest. And actually it’s got something to do with independence and having my own money. They only way to do that is by me buying a property but unfortunately I can’t do that without help on the deposit.

The broker isn’t banding around that I’m looking for a residential mortgage, he said that ironically when they said they think I’m just going to live there.

I only asked if there’s a mortgage company anyone knows of that will accept a gifted deposit for buy to let property not people opinion on stamp duty evasion. Of I could go off and buy a residential property in my own name then I would be I wouldn’t be living there and THAT would be lying.

Hannah_kr7

Of course I want income in my own name. I don’t want to live off him. Of my parents could help me then they would but sadly I don’t have that option

foxy-stoat

Hannah_kr7 wrote: »

Of course I want income in my own name. I don’t want to live off him. Of my parents could help me then they would but sadly I don’t have that option

That doesn't really work if he has to GIVE you £21,000 for you to get the extra income....and he will never ask for it back even if you ever split - OOOOKKKKEEEYYYYY.

I think your better off getting him to put it in Premium Bonds for a hope of a return....actually dont do that as it will make my chances of winning anything less.

Good lucks