Borrow to pay stamp duty

Snookie12cat

Does anyone know if there is a problem with taking a loan from a family member to cover stamp duty costs?

I would rather not take it for the mortgage because lenders normally want it to be gifted and that isn't the plan. 

Would the solicitor accept this providing you can show where the money came from?

Sistergold

When I did my purchase I had to show availability of funds which included deposit plus stamp duty and so all money had to be mine. At this initial stage I also had to show where monies came from. So in the case of those getting help if I had been given money I would have then needed to show gifting right from start meaning at this point I can not use borrowed money. I am sure others with better answers will come along. Good luck 

dimbo61

Are you buying in England ?
FTB?
Paying less than £300,000?
Keep saving !

MaryNB

Your lender will have asked about loan repayments as part of their affordability checks when you applied for the mortgage. A lender will require you to inform them of a change of circumstances prior to completion which could include additional loan repayments which may affect your ability to repay. 

Drawingaline

I was going to borrow money from a family member to cover fees and moving costs. As far as I am aware this wouldn't have been checked. As it was I had no need as the process took such a long time we managed to save enough to do cover everything ourselves.

We have borrowed from this family member previously, knew they would expect to be paid back, but no timescale required and could pay whatever we had spare each month. 

I suppose it depends on how confident you are about repaying, your relationship with the person lending and if you are able to borrow it without needing to prove it.

Is it just stamp duty you are short? Solicitor fees and removal costs already available? How much can you save monthly atm? If you are a few thousand off you may find that if you can cover the stamp duty now but are short other fees then by the time you actually need the funds at completion then you wil have enough. If it is a really large amount for stamp duty, keep saving and look at cheaper properties.

Crashy_Time

Will there be another SDH, wouldn`t it be easier if the seller just paid it?

SDLT_Geek

Snookie12cat said:

Does anyone know if there is a problem with taking a loan from a family member to cover stamp duty costs?

I would rather not take it for the mortgage because lenders normally want it to be gifted and that isn't the plan. 

Would the solicitor accept this providing you can show where the money came from?

Usually the solicitor acting for you on the purchase is also acting for the lender.  I understand that they would need to tell the lender if there is a change of circumstances.  If you did not consent to the solicitor disclosing this then the solicitor would have to cease acting.
Can you afford the property if you do not have the stamp duty?

Snookie12cat

Drawingaline said:

I was going to borrow money from a family member to cover fees and moving costs. As far as I am aware this wouldn't have been checked. As it was I had no need as the process took such a long time we managed to save enough to do cover everything ourselves.

We have borrowed from this family member previously, knew they would expect to be paid back, but no timescale required and could pay whatever we had spare each month. 

I suppose it depends on how confident you are about repaying, your relationship with the person lending and if you are able to borrow it without needing to prove it.

Is it just stamp duty you are short? Solicitor fees and removal costs already available? How much can you save monthly atm? If you are a few thousand off you may find that if you can cover the stamp duty now but are short other fees then by the time you actually need the funds at completion then you wil have enough. If it is a really large amount for stamp duty, keep saving and look at cheaper properties.

Thanks - I will temporarily have two houses so need £25k stamp duty to cover it. As soon as I sell my 2nd house it will be paid back. My family have no timescale for a return and no interest will be paid, so it sounds similar. 

I have £120k equity in my other property so its not a matter of needing to save more, just need a temp solution until I can get it. 

[Deleted User]

depends on the lender. Some will only need the mortgage deposit to be gifted or from your own resources,  some look at the entirety of the transaction costs.   Solicitor will likely report to the lender if any element has been borrowed or gifted to ensure the lender is aware and it fits within criteria.  Solicitor will want a bank statement showing the full available funds prior to exchange and will question any recent credits to the account

Snookie12cat

SDLT_Geek said:

Snookie12cat said:

Does anyone know if there is a problem with taking a loan from a family member to cover stamp duty costs?

I would rather not take it for the mortgage because lenders normally want it to be gifted and that isn't the plan. 

Would the solicitor accept this providing you can show where the money came from?

Usually the solicitor acting for you on the purchase is also acting for the lender.  I understand that they would need to tell the lender if there is a change of circumstances.  If you did not consent to the solicitor disclosing this then the solicitor would have to cease acting.
Can you afford the property if you do not have the stamp duty?

Thanks, I can afford it, I just need to cover the extra stamp duty until it sells. Then once it sells I will have almost £60k in cash kicking about after repaying my family member. 

theartfullodger

Just tell lender, as breach of conditions if loan might lead to painful consequences.

In my experience they'll likely require signed document by donor that the sum is an outright gift.