Gifted loan deposit causing stress

Bananallama_73

Hello all,

I am a FTB who does not have enough money to complete because my mortgage was offered with a retention - I'm about 4 months of savings short and my parents have generously offered to bridge that gap so I can complete.

They are fine with calling it a gift, although on a trust basis they'd like the money back when I can, which I'm fine with - the stress comes in that this could fall under a misrepresentation of assets, since it could be seen as a loan 

So I was wondering if there is any way to get out of the grey zone about this; I was thinking maybe I could sell my car to them for example? Would it be legal to sell my car at above Market price and a bit more (£4000 more) than I paid for it, or would it have to be a reasonable price?

Alternatively could I accept the gift then take a loan out after completion to repay it?

Thank you

user1977

If the mortgage lender will only accept it being a gift (have you confirmed that's actually the case?), then that's what it has to be - not a loan. A gift that you're expected to repay is a loan.

silvercar

Are you sure you are not overpaying for the property, if it needs a lot of unexpected work? 

Forget the car nonsense, if you want to repay them then pay for their next holiday etc. Retentions mean that when you’ve done the work required, the lender releases the retention, at which point you will have the money.

DullGreyGuy

If they want the money back it's a loan, if they dont its a gift. You can choose to repay a gift but you arent obligated to. 

Brie

Best to just get them to declare it as a gift.  Your solicitor and the bank will need a letter to that effect.  

If you then decide to give them a generous cash gift every Christmas for a few years, well that's up to you.  

powerspowers

No one will follow up. The ramifications of it being a gift is that in the event your property is repossessed your parents won’t be able to say that x% of it is theirs. 

I gifted my sister money in similar circumstances and she paid it back over the next few months. My husband had gifted money when we moved in together, he paid some back and then the family member told him to stop. 

Hoenir

Are your parents happy to legally declare it as a gift in writing?  Some people hate to lose control. 

Bananallama_73

Hoenir said:

Are your parents happy to legally declare it as a gift in writing?  Some people hate to lose control. 

Yes, it's entirely trust based and they're happy to say it's a gift,  but would still like it back eventually 

Bananallama_73

silvercar said:

Are you sure you are not overpaying for the property, if it needs a lot of unexpected work? 

Forget the car nonsense, if you want to repay them then pay for their next holiday etc. Retentions mean that when you’ve done the work required, the lender releases the retention, at which point you will have the money.

The property is quite cheap for what it is, so I imagine the seller had already reduced the price before putting it on the market to account for the work : /

EssexHebridean

Bananallama_73 said:

Hoenir said:

Are your parents happy to legally declare it as a gift in writing?  Some people hate to lose control. 

Yes, it's entirely trust based and they're happy to say it's a gift,  but would still like it back eventually 

From now on, it's a gift. End of. What you privately discuss with your parents behind closed doors is entirely up to you - but they will be expected to sign gifted deposit letters stating that it is a gift. The more you talk about this being repayable the more chance there is that you will accidentally let something slip to your solicitor (who presumably also acts for the lender?) and they then HAVE to inform the lender, who will almost certainly retract your mortgage offer. 

eddddy

Bananallama_73 said:

Yes, it's entirely trust based and they're happy to say it's a gift,  but would still like it back eventually 

EssexHebridean said:

From now on, it's a gift. End of. What you privately discuss with your parents behind closed doors is entirely up to you - but they will be expected to sign gifted deposit letters stating that it is a gift. The more you talk about this being repayable the more chance there is that you will accidentally let something slip to your solicitor (who presumably also acts for the lender?) and they then HAVE to inform the lender, who will almost certainly retract your mortgage offer. 

And if you decide to follow that route, you should make the same thing clear to your parents.

When asked, if they say "it's a gift" they shouldn't add "but we would like it back eventually".