Purchasing with family but not on mortgage!

Rubi87

Hi,
My sisters (4 of us) are currently looking to purchase a property. As 3 of us already have homes, my remaining sister will be purchasing solely on her name (first time buyer) She is able to get the mortgage as all 4 of us will be sharing the deposit required (£8k each). The idea is then to have a trust deed drawn up by the solicitors to confirm we all own 25% share each. The question I have is when we spoke to the mortgage advisor she asked if the deposit money is gifted and if so will need to complete a gifted form. Can we be honest with her and tell her our plans? Or will that create an issue?  Any advice will be appreciated! Thank you.

davidmcn

If you're not honest with the mortgage lender then it's fraud. It's not a gift if you're getting a stake in the property.
And if you all have an equitable interest in the property then I'm not sure what the advantage is in having only one of you as the registered proprietor.
I take it this is separate from your other current complicated purchase involving a family member?
https://forums.moneysavingexpert.com/discussion/6157520/purchasing-a-property-with-a-relative/p1

Rubi87

davidmcn said:

If you're not honest with the mortgage lender then it's fraud. It's not a gift if you're getting a stake in the property.
And if you all have an equitable interest in the property then I'm not sure what the advantage is in having only one of you as the registered proprietor.
I take it this is separate from your other current complicated purchase involving a family member?
https://forums.moneysavingexpert.com/discussion/6157520/purchasing-a-property-with-a-relative/p1

The reason we are purchasing under the one sisters name is because she will be living there. I don't really want to take another mortgage out when I am already helping my nephew out (the link you posted) I have a vast amount of savings and would like to do something with it. My sister is quite happy for us 4 to buy together whilst she lives in there and pays the mortgage as we'll be helping her out with the deposit which she doesn't have (other than her £8k). I of course do not want to commit fraud so before going ahead with this wanted to check if what we're doing is ok? The trust deed will show 4 invested parties but the mortgage will be under a sole name. 

getmore4less

the non gift covered above.
The extra SDLT will still be due if any of you have second properties and take a beneficial interest in the property.
Sister that owns the place will need to declare as taxable income the interest components of any money the other 3 pay to her to cover the loan.

Rubi87

getmore4less said:

the non gift covered above.
The extra SDLT will still be due if any of you have second properties and take a beneficial interest in the property.
Sister that owns the place will need to declare as taxable income the interest components of any money the other 3 pay to her to cover the loan.

Happy to pay the extra SDLT as it isn’t that much. 

Not sure what the bottom half means? Would you be able to clarify please? 

getmore4less

If your sister borrows the money and you pay part of that then the interest you pay is taxable income for the sister

unforeseen

Are you only providing £8k for the deposit or are you also paying 25% mortgage payments?
If not the latter then that will be a hell of an RoI, getting 25% of a house for £8k.