Helping child to buy a house

housebuyer143

gwynlas said:

You need to take legal advice regarding the best way in gifting the deposit eg do you wish to have it recorded as a loan to safeguard a future split in the relationship?

You can't record a gifted deposit as a loan. No lender will likely lend to them knowing it's a loan. 
Maybe they have different shares set up via a declaration of trust and tenants in common for their child to potentially protect their money from a split, but with a baby on the way it's likely all is fair game in the event of a split.

user1977

housebuyer143 said:

gwynlas said:

You need to take legal advice regarding the best way in gifting the deposit eg do you wish to have it recorded as a loan to safeguard a future split in the relationship?

You can't record a gifted deposit as a loan. No lender will likely lend to them knowing it's a loan. 

Though the OP said the child can't get a mortgage at the moment anyway, so presumably this is going to be funded entirely by the OP? In which case it can be a loan if they want (though that may need to change if the child is later able to remortgage).

SDLT_Geek

housebuyer143 said:

gwynlas said:

You need to take legal advice regarding the best way in gifting the deposit eg do you wish to have it recorded as a loan to safeguard a future split in the relationship?

You can't record a gifted deposit as a loan. No lender will likely lend to them knowing it's a loan. 
Maybe they have different shares set up via a declaration of trust and tenants in common for their child to potentially protect their money from a split, but with a baby on the way it's likely all is fair game in the event of a split.

If a declaration of trust is put in place giving the parents a share in the property, then I would expect the extra 3% stamp duty land tax to apply to the whole price (assuming the property is in England).

housebuyer143

SDLT_Geek said:

housebuyer143 said:

gwynlas said:

You need to take legal advice regarding the best way in gifting the deposit eg do you wish to have it recorded as a loan to safeguard a future split in the relationship?

You can't record a gifted deposit as a loan. No lender will likely lend to them knowing it's a loan. 
Maybe they have different shares set up via a declaration of trust and tenants in common for their child to potentially protect their money from a split, but with a baby on the way it's likely all is fair game in the event of a split.

If a declaration of trust is put in place giving the parents a share in the property, then I would expect the extra 3% stamp duty land tax to apply to the whole price (assuming the property is in England).

I was thinking more the extra share is written for their child, so they have no interest in the money themselves legally, but it would protect it for their family if a split did happen. 

youth_leader

I've gifted both of my children a house deposit, I know I have to live another seven years for it to be excluded from my 'estate'.  I understand that I'll be approached by their mortgage lender for ID/proof of source etc when they get to that stage. Apparently some lenders have a letter template they send for the wording of the 'gift'.  

youth_leader

I forgot to add that I'll be seeing my solicitor when the time comes, so in the event of a partnership split, my kids get their deposit back.

zagubov

housebuyer143 said:

gwynlas said:

You need to take legal advice regarding the best way in gifting the deposit eg do you wish to have it recorded as a loan to safeguard a future split in the relationship?

You can't record a gifted deposit as a loan. No lender will likely lend to them knowing it's a loan. 
Maybe they have different shares set up via a declaration of trust and tenants in common for their child to potentially protect their money from a split, but with a baby on the way it's likely all is fair game in the event of a split.

I'm not so sure. Some posters more familiar with this might be able to add more info here, but I'm sure there are a few big name banks/building societies will let you loan money to your kids and getting a charge against the property as well as them getting a mortgage on top of that.

Relationship breakdowns are really very common and gifting the money could turn out to be expensively regrettableIf .

If you charge interest there will be tax implications.

Bluebell1000

You could also consider family offset options so your money remains your own, but it reduces interest payments. See https://www.ybs.co.uk/mortgages/offset-mortgages/offset-plus-for-borrowers for one example, I'm sure that there are others.

dimbo61

Has your Child and OH guys any savings ? 
LISA,s pay in £4,000 and get government bonus of £1,000 each.
Can be used after 12 months 
Can they get a mortgage at all ?
I love offset mortgages and my Dad helps us with out offset mortgage

seven-day-weekend

We gifted our son the deposit for his flat ten years ago.  We had to provide proof of where the money had come from.  He pays the mortgage himself.

He and his partner are not married and the flat is solely in his name.

If a mortgage might be problematic, try a mortgage broker.  Our son's was problematic because a) he doesn't earn very much (but it was a cheap flat), b) he had no credit history and c) the flat only had a short lease (now extended).  The broker was able to get him a decent deal with Santander.