Rent free living at daughters property

casino00

Around about a month ago my wife and I decided to gift our daughter 40k ( with no requirement to pay it back) to help her buy her first home. She successfully applied for a mortgage and completed the required forms. This included ticking the box stating that there would be no one else living with her.

Since then my daughter has suggested that we move from our rented accommodation (which is quite expensive) to live with her rent free. We would help out with supporting heating bills and food but not contribute to the mortgage payment.

Both my wife and I thought this would be quite straight forward and could not see there being any problem, we would be helping each other out but at the same time it would be her property and we would not  want to have any future claim on the property.

We have recently read that this could be in fact illegal and the mortgage provider tend to frown on family moving into a property together. In fact it states in some cases that this could be fraud and the lender could request full payment of the remainder of the mortgage which my daughter would not be able to do.

We are now very worried about any proposed move but at the same time cannot believe we cannot live as a family together. Are you able to offer any advice, thanks Paul

MWT

The lenders main concern is the ease with which they can repossess/evict those in the property at the time if the borrower defaults on the loan.

As adults regarding the property as your main residence, who have contributed a significant amount to the deposit, but are not on the deeds or the mortgage, the lender will at least want you to agree to waive your rights of occupation.

It is a simple and cheap thing to do (it does require that you receive independent legal advice) but if your daughter asks her lender about the plan, this is most likely what they will require to be signed. 

davidmcn

casino00 said:

We have recently read that this could be in fact illegal and the mortgage provider tend to frown on family moving into a property together.

Read it where? I could see the problem if the borrower moved out, or if you were occupying the property at the start of the mortgage, but I wouldn't have thought it to breach her mortgage conditions if you move in with her - has she read them?
ETA - sorry, I missed this appears to be something which would apply at the start of the mortgage - in which case yes she would need to disclose it

Thrugelmir

Become party to the mortgage.  Gifting the deposit then making the property your home is incompatible. 

MWT

Hmm... I missed the point that the new house purchase may not even have happened yet...

If the purchase is not yet complete but you are already planning to move in then there is a bigger problem with the gifted deposit.

Doing this some time after the purchase is complete would be less of an issue, but right now before it is complete, is there any reason why you would not wish to be a party to the mortgage?

casino00

Thanks everyone

Elmer_BeFuddled

Can you not just "move in"? The times I've done that when, shall we say, "sofa surfing" is quite a lot.