Loaning family money before mortgage application

firsttimebuyer29rp

Hi all,

I’m going to be applying for a mortgage soon and am currently in the months at the moment that the lender will see my bank statements (these will cover December, January, February). 

I put money away in a tax savings account and mentioned to a family member that I could lend them some money to help them get by (approx £2k). They’ve asked if this is possible. 

My worry is if I transfer this money to their bank account, it’s obviously going to show up on my bank statement. I assume the lender will question this and ask why I’m sending that sum of money (even though I’m expecting to get it back within a few months). 

Is this going to potentially affect my chances of getting a mortgage accepted? I just feel like it may not be believable to the lender should they question it even though it is effectively a family loan from me to them. 

la531983

Surely the lender isnt asking to see your savings account, just the account you get wages paid into.  Simply give them the money and bypass the "wages" account totally.,

firsttimebuyer29rp

la531983 said:

Surely the lender isnt asking to see your savings account, just the account you get wages paid into.  Simply give them the money and bypass the "wages" account totally.,

Issue with it is I can’t transfer to another account (other than my own) from my savings account. 

So it’d have to be shown on the bank statements I provide the lender as it would be £2k in (from my savings) and £2k out (to my family). 

la531983

You could if you went into branch and took it out directly in cash. Maybe.

I suspect you are over thinking it anyway, its a perfectly reasonable explanation anyway given it will show 2k coming from savings and then going out again, my statements were littered with gambling transactions in the hundreds of pounds and not an eyelid was batted.

kingstreet

Nationwide criteria;-

Unacceptable source of deposit

• Repayment of a loan to friends or family – we’ll only accept this if it was repaid over 3 months ago. In this case, please key as savings.

sheramber

kingstreet said:

Nationwide criteria;-

Unacceptable source of deposit

• Repayment of a loan to friends or family – we’ll only accept this if it was repaid over 3 months ago. In this case, please key as savings.

The OP is not repaying a loan.

He is proposing lending money to someone.

ButterCheese

sheramber said:

kingstreet said:

Nationwide criteria;-

Unacceptable source of deposit

• Repayment of a loan to friends or family – we’ll only accept this if it was repaid over 3 months ago. In this case, please key as savings.

The OP is not repaying a loan.

He is proposing lending money to someone.

To me, the Nationwide criteria reads as:

If you are applying for a mortgage with Nationwide, we will not accept "loan money just repaid to me by family" as proof of your ingoings and outgoings, if it wasn't repaid more than 3 months ago.  If it was repaid to you less then 3 months ago, declare this as savings and not part of your income deposits (whether regular or otherwise).

Nationwide are assessing whether your normal income and outgoings are balanced enough so that you can pay your mortgage back.  So on the £2k you are still owed by your family, you can't add that as part of your incoming in the last 3 months, you have to declare it as savings.

That's my take on it anyway - I could be wrong.

If I were lending to you, I'd not factor that in the £2k at all to be honest, because I have no gurantee that the loan will be repaid to you.

la531983

ButterCheese said:

sheramber said:

kingstreet said:

Nationwide criteria;-

Unacceptable source of deposit

• Repayment of a loan to friends or family – we’ll only accept this if it was repaid over 3 months ago. In this case, please key as savings.

The OP is not repaying a loan.

He is proposing lending money to someone.

To me, the Nationwide criteria reads as:

If you are applying for a mortgage with Nationwide, we will not accept "loan money just repaid to me by family" as proof of your ingoings and outgoings, if it wasn't repaid more than 3 months ago.  If it was repaid to you less then 3 months ago, declare this as savings and not part of your income deposits (whether regular or otherwise).

Nationwide are assessing whether your normal income and outgoings are balanced enough so that you can pay your mortgage back.  So on the £2k you are still owed by your family, you can't add that as part of your incoming in the last 3 months, you have to declare it as savings.

That's my take on it anyway - I could be wrong.

If I were lending to you, I'd not factor that in the £2k at all to be honest, because I have no gurantee that the loan will be repaid to you.

He isnt asking for the bank to factor in the loan repayment as income. It may not even be paid back by the time he sends the statements off. He just wants to know if questions will be asked about when hes doing with his own money when they see the £2k going OUT.