Mortgage broker - ask me anything

getmore4less

Skint_yet_Again said:

I am hoping to sell my property to my son and his girlfriend at market value but it is a little complicated. 

I am gifting my son a deposit of £20000 of which £10000 is savings and £10000 from an interest free loan from my dad to me, to be paid back in full by me once the sale goes through. Will the lender want proof of where I got the money from and will me borrowing £10k from my dad be a problem? I am writing my son a letter to give to the lender confirming the £20k is a gift from me towards his first house purchase and does not need to be repaid. 

Also the property does not have final buildings regs on the extension built over 20 years ago before I bought it. I have an indemnity policy which I understand can be transferred to them. Do we need to tell their lender this at mortgage application stage or via solicitor later and is it likely to cause a problem? 

Sounds like an over complication, no reason you need any real money to change hands from you its not like you want a cash deposit from the buyers.

your £20k comes out of the sale funds as a gift

They borrow the £X-£40k from lender and you get £X-20k from the sale

Concessionary/gifting reduces the consideration for the purchase and SDLT which may not apply if they have the exemption.

Skint_yet_Again

Skint_yet_Again said:

Thank you @K_S for your quick response. I am selling to Son & his girlfriend. I am gifting son £20k and his gf’s parents are gifting her 20k so it seemed to make sense to sell to them at market value and then they can use their deposits separate ? 

Sorry I am not sure what you mean @getmore4less They are getting a mortgage for £250000 I am gifting my son £20k and his gf parents gifting her £20k so they have 40k deposit ? 

Skint_yet_Again

I have spoken to my solicitor and he has said it will be a nightmare for my sons solicitor due to money laundering regulations for me to gift £10k and borrow another £10k from my dad. He has said it would be better for me to gift £20k on completion from the equity. I am very new to all this so I will have to be guided by my solicitor. 

Amateurretiree

My son and his partner intend buying their first home together, it’s her second purchase but his first. Will be circa 250-260000.

will they have to pay stamp duty as she is not a first time buyer? House will be in both names.

TIA.

K_S

Amateurretiree said:

My son and his partner intend buying their first home together, it’s her second purchase but his first. Will be circa 250-260000.

will they have to pay stamp duty as she is not a first time buyer? House will be in both names.

TIA.

@Amateurretiree Afaik, If one joint buyer is an FTB but the other is not, they'll still need to pay the full stamp duty. The only way that they could get away without paying is by making your son the sole owner of the property.

Amateurretiree

Thanks. Could they do that if they need both wages to get the mortgage though? 

And are there any downsides to doing that?

K_S

Amateurretiree said:

Thanks. Could they do that if they need both wages to get the mortgage though? 

And are there any downsides to doing that?

@Amateurretiree They'd need what's called a "joint borrower sole proprietor" mortgage to use both their incomes but only one owner.

There may be non-mortgage implications (for your son's partner) that I can't comment on. Personally speaking, I think it would be overkill to save a stamp duty payment of 2.5k on a 250k property.

getmore4less

Skint_yet_Again said:

I have spoken to my solicitor and he has said it will be a nightmare for my sons solicitor due to money laundering regulations for me to gift £10k and borrow another £10k from my dad. He has said it would be better for me to gift £20k on completion from the equity. I am very new to all this so I will have to be guided by my solicitor. 

That's what is being said don't need the money as cash up front.

Sell for £290k but only take £270 in cash.

 do they have a decent  broker on this to present the case to the lender.

Skint_yet_Again

getmore4less said:

Skint_yet_Again said:

I have spoken to my solicitor and he has said it will be a nightmare for my sons solicitor due to money laundering regulations for me to gift £10k and borrow another £10k from my dad. He has said it would be better for me to gift £20k on completion from the equity. I am very new to all this so I will have to be guided by my solicitor. 

That's what is being said don't need the money as cash up front.

Sell for £290k but only take £270 in cash.

 do they have a decent  broker on this to present the case to the lender.

Thanks for your help. I didn’t understand about the deposit gift and thought it had to be cash. Have spoken to my son and they
are going to use a broker recommended by 2 of their friends 

csgohan4

LLoyds remortgage deals, how far in advance can you reserve a product. I'm looking at the 5 year 1.66% 60% LTV