deposit gifted by a friend

Terrier_T

I currently rent and the landlord wants to sell, They cannot complete on a sale until June 2027

I do not have the savings for the deposit to be able to provide the deposit. However a very close friend has just gifted me some money. They dont want the money back at all.

Im being told i cannot use that money as a deposit as they are not a family member.

Is there something i can do to be able to use my gifted money for a deposit?

Just as a bit of background . House price £165000, Gifted money to put towards house is maximum £50000

UnsureAboutthis

some will allow it but rightly so want to see clear evidence if is a 'gift' and you know what 'gift' means, ie even when she/he/they fall out with you - cant get money back, you buy property, prices fall dramatically, or you go bankrupt/ill/lost your job, go prison/etc/etc and there may not be a penny left in the palce for anyone other than lenders - lenders are required to check where your friends got his;her money etc - so some will but many, many more checks etc - and 'June 2027' a million things could happen between then and now and if you are on benefits, I'm not sure how that one works out re 50k gift. So, many, many variables. Good luck

Another thing which may conenr the lender/s rightly so, if someone cant muster a few k (not saying you cant) together over the many years of work/etc, how will the pay the lender/bills etc

Albermarle

Im being told i cannot use that money as a deposit as they are not a family member.

Told by who ?

For sure you will have to show where the money has come from, and your friend will have to do the same. Everybody is on the lookout for potential money laundering, and a large gift from a friend will arouse more attention than if it was from a parent for example.

kingstreet

Who is telling you a gift from a friend can't be used?

If it's a mortgage lender, that's their choice. There are lenders who will accept. Find a decent broker who will shortlist the lenders who will lend.

FlorayG

A friend of mine gifted a friend of her three times that so that he could buy the house she now lives in rent free.

Yes it's a strange arrangement but there was no problem for him over the gift

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82108997#Comment_82108997

Sounds like some kind of tax dodge, but as far as IHT is concerned that would be considered a gift with reservation of benefit so does not fall out of her estate under the 7 year rule. Might also be seen as deliberate deprivation of assets if she ever needed residential care.

tacpot12

What savings of your own do you have? If the answer is zero, this looks more suspicious from a money-laundering perspective as there is no way you could expected to buy a house without your 'friend' helping out.

It might be worth speaking to a mortgage broker to see if the same rule is apply by all lenders, or if it is just the lender you have spoken to.

Do you have a family member whe might lend you the minimum needed for a deposit? 5% Deposit mortgages are available, so you only need a deposit of £9,000. Once you have the mortgage, you can make additional capital repayments using the money you have been gifted. This will reduce the capital you owe so that you can access lower rates when you remortgage.

user1977

https://forums.moneysavingexpert.com/discussion/comment/82108997#Comment_82108997

Was there a mortgage lender involved and if so were they made aware of the arrangement? Normally they expect a "gift" to be with no strings attached.

Exodi

https://forums.moneysavingexpert.com/discussion/comment/82108997#Comment_82108997

Potentially until she needs care and/or dies.

FlorayG

https://forums.moneysavingexpert.com/discussion/comment/82109015#Comment_82109015

Oh it's a long and complex issue and I still haven't got it all figured out. She knows nothing about money

I have a previous post about it somewhere if you're interested

silvercar

The problem can be that mortgage lenders don’t accept gifted deposits from friends, because they suspect that the gift is actually a loan.

There is the question of how long it is before a gift becomes your own savings. Gifting a year ahead of a purchase may make some solicitors and some lenders consider it your money.