Gifted deposit

kelsgem17

My mum has kindly said she will give us a gifted deposit for our mortgage. She will sell the flat we live in to fund it. My question is as we live in the flat she is selling we can't leave until our sale is completed. How can I give 10% deposit at exchange of contracts when I don't have it until the flat is sold but we have to stay in the flat as we have no where to live. Can we exchange and completed the same day? my mum is selling her flat to the local council so don't think they will release 10% at exchange of contracts i believe they are exchanging and completing on the same day. I'm panicking.  Mortgage has been offered and an offer on the property we are wanting has been accepted 

user1977

Where does/will mum live?

BikingBud

kelsgem17 said:

My mum has kindly said she will give us a gifted deposit for our mortgage. She will sell the flat we live in to fund it. My question is as we live in the flat she is selling we can't leave until our sale is completed. How can I give 10% deposit at exchange of contracts when I don't have it until the flat is sold but we have to stay in the flat as we have no where to live. Can we exchange and completed the same day? my mum is selling her flat to the local council so don't think they will release 10% at exchange of contracts i believe they are exchanging and completing on the same day. I'm panicking.  Mortgage has been offered and an offer on the property we are wanting has been accepted 

Unsure how you get to this position without understanding how you intend to make it work!

But my interpretation, from "flat we live in" is that you live in the same flat as your mum and there are not 2 separate flats. On its own this might cause problems depending upon where she intends to live in the future and what other assets she might have.

If the intent is that mum sells flat, gifts you a deposit and goes for a binge on the rest then that would I feel be considered as deprivation of assets. If she moves in then she will have a beneficial interest in the new home and this will cause issues.

Additionally has the "gifted" deposit been notified and approved by you mortgage lender?

And has the lender agreed that your mum will live in the property yet not be on the mortgage?

It is normal that purchasers place the deposit from own funds and upon completion for funds to be passed up the chain from purchaser to vendor to purchaser on the day. However, I feel that there any many aspects of this that would not be acceptable and without more information about the intent and the arrangements an accurate answer cannot be given.

Who is advising you, either mortgage advisor and or solicitors? What do they say about your plan (you and mum)?

When do you expect to proceed to exchange? Is that realistic?

Emmia

kelsgem17 said:

My mum has kindly said she will give us a gifted deposit for our mortgage. She will sell the flat we live in to fund it. My question is as we live in the flat she is selling we can't leave until our sale is completed. How can I give 10% deposit at exchange of contracts when I don't have it until the flat is sold but we have to stay in the flat as we have no where to live. Can we exchange and completed the same day? my mum is selling her flat to the local council so don't think they will release 10% at exchange of contracts i believe they are exchanging and completing on the same day. I'm panicking.  Mortgage has been offered and an offer on the property we are wanting has been accepted 

Are there any other reasons your mum is selling the flat, or is it solely to give you a deposit? If that's the only reason, can you stay put, and save up some money yourself for a deposit, moving costs, emergency fund?

Owning your own place is an expensive business, so if you're not able to save for a deposit now whilst living in a property owned by your mum (are you paying out lots of money on bills etc), can you actually afford to buy and pay for ongoing property ownership costs - e.g. mortgage, bills, maintenance... improvements?

Olinda99

Yes you can exchange and complete on the same day

This would avoid the problem of you selling the flat and moving out in order to get the deposit

kelsgem17

Thank you. I am waiting for my solicitor to get back to me so probably just being an over worrier. Exchange and complete would stop all the worry of no where to live. Mum has her one bedroom place of her own and will not be able to stay with her.

FlorayG

You can exchange and complete on same day but do be warned - a friend of mine arranged this, all her belongings were on the removal lorry waiting to go and her buyer pulled out. They can do this right up until minutes before exchange. She had to pay removal costs, lost the house she was going to and lived out of boxes until she found another buyer for her house and another house to buy. The stress was immense.
Another option would be to put your belongings into storage and stay AirBnB after exchange - more expensive as two lots of removals but possibly safer

Markmywords

kelsgem17 said:

Thank you. I am waiting for my solicitor to get back to me so probably just being an over worrier. Exchange and complete would stop all the worry of no where to live. Mum has her one bedroom place of her own and will not be able to stay with her.

You can exchange and complete on the same day. Are you in a chain? If so it might be tricky to organise. Does your mum already have another flat as well as the one she is selling for you. 

kelsgem17

Markmywords said:

kelsgem17 said:

Thank you. I am waiting for my solicitor to get back to me so probably just being an over worrier. Exchange and complete would stop all the worry of no where to live. Mum has her one bedroom place of her own and will not be able to stay with her.

You can exchange and complete on the same day. Are you in a chain? If so it might be tricky to organise. Does your mum already have another flat as well as the one she is selling for you. 

Mum has her own place she lives in. No chain just council buying off of her and then us buying a property with no chain 

saajan_12

Effectively that is a chain, just without being able to pass the deposit up the chain. 

Technically yes you could exchange and complete on the same day, but in practice your vendor may or may not agree to it. It would mean you and they don't know until the morning of whether its happening, so have to book removals, pack, etc when it could all fall through. 

If they don't agree, the alternative is move into rental > mum sells house > exchange on purchase > complete on purchase > move out of rental.