We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

A loan to buy a house now has to be a gift?

I loaned a friend some money to help him buy a new house. The conveyancing company want proof of ID, a bank statement showing the funds being taken and a letter stating that is a non-refundable and unconditional gift which it isn't. Are they within their rights to insist on this and is there any way I can get around this without lying?
«1

Comments

  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    edited 3 March 2020 at 3:38PM
    Yes, they are within their rights to ask you.  If you lie your friend wont be able to buy the house, and you will aid him in committing mortgage fraud.......on the surface of it I would tell the truth and keep your money in your bank.
  • KatrinaWaves
    KatrinaWaves Posts: 2,944 Forumite
    1,000 Posts Second Anniversary Name Dropper
    Your questions: yes they are right to insist on this, and no you cant without lying.

    They are judging his mortgage ability based on his affordability. He didn't save his own deposit and he has to factor in paying back you alongside his mortgage repayments/householder expenses. He doesnt have a deposit he has a debt.
  • mcpitman
    mcpitman Posts: 1,267 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Your friend has indicated this is a gifted deposit.

    If that is not the case (for example you want the money back), then you need to be honest with the Solicitor for the reason stated by KatrinaWaves above
    Life isn't about the number of breaths we take, but the moments that take our breath away. Like choking....
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    Anyone else get a personal message with the OP's reply?  I am out.
  • Sorry Foxy, I am a forum newby and didn't realise I had gone off piste!

  • DCFC79
    DCFC79 Posts: 40,610 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Yes its how it is, he either gives you the money back, you lie stating it is a gift and the 2 of you agree on x amount per month or you write the money off.
  • JayRitchie
    JayRitchie Posts: 538 Forumite
    Seventh Anniversary 500 Posts Name Dropper
    If you do state its a gift then in effect that is exactly what it becomes. You would have no real chance of ever pursuing the debt if he decided not to pay.
  • JGB1955
    JGB1955 Posts: 3,687 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    If it's NOT a gift then it becomes a100% loan on the house..no lender is going to go with that!
    #2 Saving for Christmas 2024 - £1 a day challenge. £325 of £366
  • John_
    John_ Posts: 925 Forumite
    500 Posts Name Dropper
    I loaned a friend some money to help him buy a new house. The conveyancing company want proof of ID, a bank statement showing the funds being taken and a letter stating that is a non-refundable and unconditional gift which it isn't. Are they within their rights to insist on this and is there any way I can get around this without lying?
    Yes, your friend has lied to them and said that it is not a loan, so they are definitely within their rights to seek confirmation.

    Don’t lie, you’ll be taking part in financial fraud if you do.
  • [Deleted User]
    [Deleted User] Posts: 3,297 Forumite
    1,000 Posts Fourth Anniversary Photogenic Name Dropper
    JGB1955 said:
    If it's NOT a gift then it becomes a100% loan on the house..no lender is going to go with that!
    There are lenders who will accept a borrowed deposit as long as affordability stacks up.  I think Santander might be one such lender.
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 347.2K Banking & Borrowing
  • 251.6K Reduce Debt & Boost Income
  • 451.8K Spending & Discounts
  • 239.5K Work, Benefits & Business
  • 615.4K Mortgages, Homes & Bills
  • 175.1K Life & Family
  • 252.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.