Gifting deposit to partner

firsttimebuyer001

We have found ourselves in an odd situation as first time buyers. I am PhD student, due to finish next year, who has been receiving a tax-free stipend throughout my PhD, equivalent to a good salary which has allowed me to save. My boyfriend has a permanent job and also has savings. We have had an offer accepted on a flat and have enough saved for a good deposit between us however we have run into some problems. As I am technically a student lenders won't let me be on the mortgage, despite being able to show proof of earnings. For that reason our mortgage broker advised us to apply in my boyfriend's name only as he earns enough to cover the repayments easily on his salary alone, even though I would be contributing half the deposit and paying half the mortgage in practice. The broker has told us that I will need to gift my boyfriend my half of the deposit (he found a lender that will allow a gift from non-family members) which is fine as our solicitor had said that we can draw up a Minute of Agreement to reflect that I will be paying towards the property and that we would divide any money from the sale equally if anything were to happen. My boyfriend will also make a will so that I inherit the property.  However the broker has said that I will need to sign a document for the mortgage company to say that I do not have any interest in the property and he is unsure how that will be affected by the Minute of Agreement. Also reading around it sounds like most lenders don't like the person who gifts the deposit living in the property.  We want to buy the flat and can afford it but are also nervous about the fact that I would have absolutely no right to the property if the worst was to happen. I know we could wait until I finished my studies but the mortgage broker said that unless I were to get a permanent contract I would need to be working for at least a year before even some lenders would consider me. It just seems counterintuitive that I have money for a deposit, am earning (albeit with a fixed end date) but that having me associated with the property negatively affects us, even though my boyfriend can afford it alone? I am wondering if anyone has been in a similar situation and if so how did it get resolved?

foxy-stoat

I doubt many people have been in this similar situation but I would wait until you both can be on the mortgage, so you can protect your cash and it should be relatively painless.

Try another broker though, just in case they have a lender that will allow your income and employment status.

Thrugelmir

firsttimebuyer001 said:

I am wondering if anyone has been in a similar situation and if so how did it get resolved?

Plenty of people attempt to circumnavigate the rules. Always have always will do. 

Of course you are allowed on the mortgage. Many partners are non earners. The issue is most likely affordability. Whilst you have your stipend now, what are your plans going forward? 

[Deleted User]

Defo try another broker. The whole “convoluted” scheme he is suggesting absolutely stinks ! Of course you will have an interest in the property - saying you dont is lies. 

Mortgage companies dont like the “giftee” living in the property 

Plus many non earners are on the mortgage and deeds. 

Hopefully some brokers will offer their advice ( Im not a broker) but to me the whole thing sounds wrong 
 

[Deleted User]

no reason to leave you off the mortgage if you dont have an income.    Also there are lenders that will even take your stipend as an income source.    You are trying to find a solution to a problem that seems to have been created by lazy advice. 

There are plenty lenders who kill affordability when there is a non earning applicant, but there are equally as many who lend exactly the same regardless.  If you just have an income that isn't standard and thats the only reason you are being told you cant be on the loan then get different advice and do it properly. 

And if all else fails then Sole Mortgage Joint Ownership is the convoluted option that the broker should be suggesting. That protects your interests and solves the mortgage 'issue'

Edit:  going to edit to caveat that I don't know your financial situation but the advice sounds sketchy at best

firsttimebuyer001

Thanks for the comments! We had originally asked about lenders that allowed a stipend as income but were told it was only NatWest and they currently are asking for a 30% deposit which we don’t have. We have enough for a 10% deposit ourselves or a 30% deposit using the Scottish government first home fund (only some lenders use the first home fund, NatWest isn’t one of them). But the advisor said that since we couldn’t use NatWest that I could not be on the mortgage or the deeds as no other lender would accept me. We are also not keen about this as it means I can’t use my Help To Buy ISA bonus. It’s turned out very messy and I know we are not the ideal first time buyers (my studentship finishes in March and my job prospects are good but will probably be on a fixed term contract for a year after finishing) but maybe we should get a second opinion!

[Deleted User]

Platform do 10% mortgages and take stipend income as long as its not the only income on the case.   Do they lend in Scotland?