Being Gifted Mortgage Equity in Trust

SpendingMoney

I’m going through a horrible relationship breakdown & am struggling to afford to stay locally as it’s an expensive area.

My ex’s father has offered to gift me around 25K in equity, to be held in trust for his grandchildren. 

My ex has form for controlling behaviour and I’m suspicious of his motives.

I would prefer a clean break & think that if his dad wants to help him out, fine  - so he could then give me more equity as part of the settlement  - but maybe it’s not that simple? Or there could be other disadvantages?

His dad is 76 so there are concerns about inheritance tax & I don’t want to be involved in that.

any thoughts welcome.

MWT

There are other issues with using that as a deposit as it will not be considered as a 'gift' by many lenders as there are reservations attached to it.

A bit more detail about what is being planned here might help though, is there a currently mortgage property that is being sold or is the plan for you to remain in the current property with a new mortgage?

SpendingMoney

Thanks for your comments - my mortgage advisor has said it’s not straightforward - that the lender might not accept it & I might  not be able to use it for a deposit. 

I’ll say to my ex that he needs to sort things out with his dad himself, rather than involving me.

SpendingMoney

@MWT - the plan would be that I come off the title deeds of the current jointly owned house (after my ex buys me out with a lump sum).

 And I would use this towards a new property, with the additional equity gifted to the children from my ex-FIL.

I’m wondering if it might be easier for my FIL to gift the money to my ex & let them deal with all of this - but it may mean my ex can’t buy me out if it’s gifted to him?

MWT

It sounds like your mortgage advisor is giving you good information already.

A clean separation with the money coming from your ex without the reservations regarding the children would be a lot cleaner and easier to use for sure, but it sounds like they may not be willing to simply increase the settlement amount., so not sure if that is even an option.

Thrugelmir

Are you consulting a family law solicitor? 

SpendingMoney

Yes, I’ve  spent a fortune on a family solicitor already.  😫I’d rather he spent the money sorting this out than me! 

SpendingMoney

And the other thing that really bothers me is that I’m right at the top of my affordability in mortgage terms. My income would be about £1700/1800 a month & bills are £850 for basics plus mortgage & kids costs £100 plus childcare. So it’s really tight & I’m worried if I get an AIP then fail the affordability once the lender checks my bills etc.