First Time Buyer mortgage - deposit problem
Discussion
Hoping someone can shed some light on how lenders might view this scenario.
Daughter received some inheritance late last year , about £65k in total. She already has a lifetime ISA which she had already contributed £4k into for the current tax year. Think she has £12k in her lifetime ISA. At the time she had no plans to buy anywhere in the immediate future , so tied her money up in a Ford Money fixed rate account for one year.
Fast forward this weekend, and she's seen a property she really likes! Property is on the market for £180k, so she would have a pretty healthy deposit for a first time buyer. I imagine lots of lenders would be happy to have her business, if only her money wasn't tied up!
Now I'm in a position where I can gift/lend her that amount and she would pay me back when her fixed rate account expires . How would lenders view that ? Does it make things overly complicated?
TIA
Daughter received some inheritance late last year , about £65k in total. She already has a lifetime ISA which she had already contributed £4k into for the current tax year. Think she has £12k in her lifetime ISA. At the time she had no plans to buy anywhere in the immediate future , so tied her money up in a Ford Money fixed rate account for one year.
Fast forward this weekend, and she's seen a property she really likes! Property is on the market for £180k, so she would have a pretty healthy deposit for a first time buyer. I imagine lots of lenders would be happy to have her business, if only her money wasn't tied up!
Now I'm in a position where I can gift/lend her that amount and she would pay me back when her fixed rate account expires . How would lenders view that ? Does it make things overly complicated?
TIA
z4me said:
Hoping someone can shed some light on how lenders might view this scenario.
Daughter received some inheritance late last year , about £65k in total. She already has a lifetime ISA which she had already contributed £4k into for the current tax year. Think she has £12k in her lifetime ISA. At the time she had no plans to buy anywhere in the immediate future , so tied her money up in a Ford Money fixed rate account for one year.
Fast forward this weekend, and she's seen a property she really likes! Property is on the market for £180k, so she would have a pretty healthy deposit for a first time buyer. I imagine lots of lenders would be happy to have her business, if only her money wasn't tied up!
Now I'm in a position where I can gift/lend her that amount and she would pay me back when her fixed rate account expires . How would lenders view that ? Does it make things overly complicated?
TIA
You can gift her the money, you'll have to sign a disclaimer that it's not a loan and no security over the property will be taken.Daughter received some inheritance late last year , about £65k in total. She already has a lifetime ISA which she had already contributed £4k into for the current tax year. Think she has £12k in her lifetime ISA. At the time she had no plans to buy anywhere in the immediate future , so tied her money up in a Ford Money fixed rate account for one year.
Fast forward this weekend, and she's seen a property she really likes! Property is on the market for £180k, so she would have a pretty healthy deposit for a first time buyer. I imagine lots of lenders would be happy to have her business, if only her money wasn't tied up!
Now I'm in a position where I can gift/lend her that amount and she would pay me back when her fixed rate account expires . How would lenders view that ? Does it make things overly complicated?
TIA
If you tell them it's repayable, most lenders will decline your application.....
z4me said:
Cheers Sarnie, I was hoping you would respond. Does the complication of a gift forming part of the deposit mean her list of lenders will reduce? Would it make the use of a mortgage adviser even more beneficial?
It won't have significant impact on the lenders available.As a broker, I'd always advocate the use of an advisor
Don’t you often just lose the interest on those fixed investment accounts?
Might be worth checking on terms unless the cost is prohibitive?
Edit: just looked. Seems not.
0.47% for 1yr is pretty crappy with £65,000.
I think £50,000+ got 0.5% and is now at 0.6% with YBS late last year, and that’s a standard flexible savings account.
Might be worth checking on terms unless the cost is prohibitive?
Edit: just looked. Seems not.
0.47% for 1yr is pretty crappy with £65,000.
I think £50,000+ got 0.5% and is now at 0.6% with YBS late last year, and that’s a standard flexible savings account.
Edited by Mr Whippy on Friday 2nd April 11:53
No doubt what ever Ford charge you as a early redemption fee would still be less than the cost of a house going up in a year.
You could gift her the money sign the disclaimer then just not stick to it, I doubt they would ever find out.
Although some banks are getting tighter with accepting gifted deposits
You could gift her the money sign the disclaimer then just not stick to it, I doubt they would ever find out.
Although some banks are getting tighter with accepting gifted deposits
Just goes to show that time v reward is all part of the risk profile you need to look at with any investment regardless of your age. You never know when you might need that money.
£500 for "losing" £65k for a year is a lot of risk for the reward should you need the money.
A good lesson to learn though at a young age.
£500 for "losing" £65k for a year is a lot of risk for the reward should you need the money.
A good lesson to learn though at a young age.
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