First time buyer, spouse complications?

jealsrealdeal

Hi all! First post on here so please bear with me if I do anything wrong. 

Wife and I are wanting to buy our first home together because we're sick of renting at this point, especially with pets and baby. Neither of us have owned property before. We each have a lifetime ISA. Wife is stay-at-home currently to look after the baby.

Long story short, we found a place we want. We life in Scotland and wanted to use the First Home Fund scheme, deadline for this was last Friday so our mortgage advisor made a fairly rushed application for this, and to do so we had to get our decision in principle. Best mortgage offers were for my name only, joint applications reduced the lending amount. We were fine with this as we are married so it makes little difference whose name is on the deed, right? Well the hitch is that we are now unable to use my wife's LISA savings towards the property. Apparently she also won't be able to transfer the funds to me (minus the withdrawal penalty) because a spouse is apparently not allowed to "gift" a deposit. 

Would appreciate any thoughts or advice about this.

Thrugelmir

Your wife is a financial dependent and will need to be declared on the mortgage application form irrespective if she's party to the mortgage or not.  Gifts from spouses aren't gifts as such. By contributing to the deposit this will give your wife a financial interest in the property. A legal position that the lender will find unacceptable. 

Edit. Contributing to the deposit as a joint applicant is obviously acceptable. 

foxy-stoat

Ask your broker for the best way forward, assuming you used one.

jealsrealdeal

foxy-stoat said:

Ask your broker for the best way forward, assuming you used one.

That's what brought me here, actually. It's the broker/advisor who said the lender doesn't allow spouses to gift to each other. But from our perspective it's shared money as we're married. (LISA rules aside) Our intention all along was to buy the house together, but again we were happy to go with whatever on the mortgage application and deed because we are under the impression it would be considered a shared asset. I guess I'm hoping for second opinions?

Thrugelmir

jealsrealdeal said:

foxy-stoat said:

Ask your broker for the best way forward, assuming you used one.

That's what brought me here, actually. It's the broker/advisor who said the lender doesn't allow spouses to gift to each other. But from our perspective it's shared money as we're married. (LISA rules aside) Our intention all along was to buy the house together, but again we were happy to go with whatever on the mortgage application and deed because we are under the impression it would be considered a shared asset. I guess I'm hoping for second opinions?

Why aren't you making a joint mortgage application ? No problem then.