Gifted deposit from overseas - 'loan'

aestivus

Hi everyone,

I'm getting myself ready to start looking to buy my first flat in a couple of months, and I could use some advice.

Briefly: I have a deposit of roughly 25-30% of the kind of property I wish to buy, and my parents, who live in Australia, have very kindly agreed to help me out further. However, as they have three children and wish to be scrupulously fair, their lawyers have suggested setting it up as a loan with no repayments until such time as they die - at which point it would be repaid out of my share of the estate.

This, however, then makes it a loan as far as my future lender is concerned, I would assume, even if in practice it won't increase my debt.

Is there any way around this that anyone can suggest? Obviously, I want to be above board in this - and I would like the additional money for the deposit, but preferably not in a way that is going to reduce my borrowing power/make things much more complicated for me.

Thank you!

Sea_Shell

From what I've heard on here, Mortgage lenders want it in writing, that it is a "gift without reservation" for them to consider it.

What your parents then decide to do by way of their wills, is an entirely different matter. Or, if you all get on well, they could leave everything 3 ways, and rely on your honesty to give your siblings their share of your debt back, by way of a DoV if necessary.

So if you'd been given £60k (for example), you'd need to give them each £20k back from your inheritance. You'd need to agree if any interest would be payable to them too, as the estate wouldn't have been able to benefit from that money growing within it in the meantime and to off-set the inflation gain that you will have made during the period of the "gift"

As you can appreciate, the value of £60k now, will be much reduced over say 15 years, so you giving your siblings only £20k will seem like less. IYSWIM.

This, of course, is assuming there is anything left to inherit, and your parents haven't had need to spend it all. Then your siblings might have their noses put out a bit.!!

Money and family..... best not to mix them.

kingstreet

There are one or two lenders accepting a loan from parents. Get broker guidance on this.

ACG

Kingstreet is right, there are lenders who will probably do this but they are few and far between. On the upside it should be at normal rates.