Beyond belief

feynman33

Sterile said:

born_again said:

The £5K loan will also affect the affordability of the mortgage.

No it won’t as it’s an informal arrangement with a family member and not an official loan with a set repayment structure which needs to be kept to. As far as the mortgage process is concerned, the 10k is a gift and she can sort out paying back the 5k to her Dad between themselves somewhere down the line.

Not true. Many/most lenders will indeed consider it debt and factor it into the affordability, regardless of how informal. The OP should keep things simple declare it all as a gift.

kingstreet

It can only be included in affordability if there are regular repayment terms. A loan repayable eg on the sale of the property wouldn't and several lenders have no issue with such action.

WillowLeaf

Where does the bank come in to play here?

If a parent wants to gift a child money, that is between them. Is it that when she is getting a mortgage they are asking where she got her deposit from?

user1977

WillowLeaf said:

Where does the bank come in to play here?

If a parent wants to gift a child money, that is between them. Is it that when she is getting a mortgage they are asking where she got her deposit from?

Firstly, the lender will prefer that the borrower is putting up their own equity. And if they accept a gifted deposit being made, that will usually be restricted to gifts from close family members (if somebody more remote then there will be suspicion that there's actually another loan).

Secondly, the solicitors need to verify the source of all the funds, whoever is providing the equity. So (as the OP has been asked) they'll want to see ID and bank statements to check it's not being laundered from an unknown source.