Buying a House - Money from parents

Maybe this is good advice on your planet, but here on planet real world, I'd say bollocks, just dont tell them. Otherwise its all going to get far too complicated and cost you more with all the additional legal stuff and benefit no one but lawyers.

Very poor advice, because if they discover it, you're up shit creek.

Well, in my case, it was simply a matter of me signing a letter to say that it was an unconditional gift.

Uncomplicated, and didn't cost a penny to the solicitors.

In message , Tumbleweed writes

That's what I usually say too

Sometimes a lender will want to see evidence of the borrowers money, so it might be necessary for the parents to transfer it to their bank account, with enough time for it to appear on a statement, before it goes to the solicitor.

Ok, that's great, thanks to everyone for clearing that up. I will ensure they avoid bus routes for the next 7 years.

My folks will be in place of a mortgage so I don't have to deal with a commercial lender worried about precedence.

I'm still a little concerned about transferring funds to the solicitor, there was a thread about this a couple of days ago and it worried me, if my folks transfer the funds to me first will somebody wonder where I got the funds (or been the funds hiding) from? Or if my parents gave a cheque direct to the solicitor along side mine will he consider this third-party funding (with me owning the title)?

I can see how this could look wrong, i.e. Johnny Good-boots buys a property in his name but Johnny Bad-boots helps fund it, though this probably only applies to mansions and people a bit more extraneously linked than parents.

Thanks.

Who are 'they' and how would 'they' discover it? How does the lender know the source of the money in your bank account? I dont ever recall anyone doing an audit on the source of the money in my account every time (or in fact any time) I applied for a mortgage.

Unless the OP is a prominent politician with the labour party, its seems kind of unlikely 'they' will ever find out.

Well, should 'they' discover it, a simple letter would be all that was needed then. By writing the letter beforehand, and presenting it to the lender, one is inviting trouble.

BTW, I take it that letter was a lie, since the "unconditional gift" was paid back and that was the intention from the start? Presumably should 'they' discover that, then "someone" would be 'up shit creek'?

For you maybe. For some anal lenders (and solicitors) I can hear the can opener on the tin marked 'worms' starting to turn already.

Ahah I dont think you mentioned this before! So its a cash deal effectively.

In which case I change my mind and dont think there would be any harm in your parents signing a letter stating the money is an unconditional gift 'just in case' since the size of the deal might warrant someone looking? For example arent bank managers meant to report cash xfers of more than 10k? I had envisaged they were just making up your deposit.

I would if I was the solicitor, better it all comes from your account. So make sure your parents cheque is cleared and the money is in your account before writing the cheque. And make sure your solicitor has a seperate account for deposits! I cant see the solicitor asking you where you got the money from though. All (s)he would know is that you are a cash buyer.

I restate my original comment ...you worry too much :-) ..unless you are a high ranking person in the Labour Party.

Lucky you.

I shouldn't think so, but you could just tell him it's from your parents and there's no reason for him not to believe you. In any case, he's *your* solicitor, so is on your side. If he can think of problems, he'll tell you soon enough.

Well, it *is* third-party funding, but what difference should it make whether or not he considers it to be such? Just tell him the truth, that you parents are part-giving and part-lending you the money, and that they are not sufficiently worried about when (and indeed whether) you'll pay them back, to bother about requiring you to give them a mortgage.

In message , Zoe Brown writes

No. If, for example, the dosh was borrowed form a money lender with huge repayments that put the mortgage repayments in jeopardy then it would cause huge problems. That is why the mortgage app form asks the sepcific question.

In message , Zoe Brown writes

Exactly! But you said earlier they wouldnt care where the money had come from, but here you make it clear that they do care.

In message , John Laird writes

No, the security isnt the problme in this regard its the ability to repay being impaired by extra loan commitments.

Which is why the mortgage offer requires a first legal charge. If that isnt available then the loan doesnt complete. The mortgagees instructions to solicitors will also likely include an instruction to report any contemporaneous subsequent charges.

Agreed.

In message , Tumbleweed writes

Whys that then?

In message , Ronald Raygun writes

How do you know shes not ugly?

But the giftee could be liable for IHT on the gift if the giftor kicks the macbucket (that IS what you call it up there isnt it?) and has no more dosh left at the time of death

Yes!

In message , snipped-for-privacy@isbd.co.uk writes

I take your point and most dictionaries also agree with you.

However, from a taxation point of view, the use of the word 'gift' makes it clear the payment is more than a customer giving money to a shopkeeper in return for items, or than a bank giving dosh to client in the form of a loan. The word 'gift' makes it clear that the payment is absolute and is not any form of consideration and without condition.

It's a figure of speech, and such a lovely figure too!

You taunting the anti-gift pro-give lobby? Naughty!

The point I was making is that if the money was merely lent, then all of it needs to be repaid. If donated, then at most a percentage of it will need to be forfeit, which will be less than 100%.

I wanted to turn an old bucket into a macbucket for the amusement of passing tourists, but the shop had run out of tartan paint, so it'll have to wait.

I'm not convinced there's any difference in meaning in the context being discussed though. Is there any difference in meaning (legal or otherwise) in the following two sentences:-

My father gave me £10000 towards buying my house.

My father gifted me £10000 towards buying my house.

wrote

Yes. The first could be a gift or a loan; the second is definitely a gift!

Of course there's a difference. The second sentence means he is not expecting it back. The first can also mean that, but doesn't necessarily.

Is that just your understanding or would it have any real legal impact? I'm not convinced that if one produced a 'statement of intent' that the difference in wording would have much impact.

That may be your understanding, what I'm saying is that it isn't my understanding of the above sentences and I'm not convinced that (if it came to a dispute) it would be understood differently.