Parents paying my mortgage

[Fullofpudding]

Morning, does anyone know if it's possible for my parents to take over my mortgage direct debit without any implications? Just wanted some advice before I officially asked the bank. My circumstances have changed and my parents have offered to step in. Thanks

Why don't your dp put the money into your bank to pay the mortgage each month? Do the mortgage provider need to know?

Agree with the above, just get them to set up a standing order to your account and pay as normal

Yes above best way!

Yes, get parents to set up a s/o for the mortgage amount to your account a week before the payment goes out. Simple.

The standing order solution works perfectly if you are not in big financial trouble and are good at budgeting. If your account is overdrawn and is still overdrawn when the money from our DP goes in your mortgage can still be returned unpaid.

I wouldn’t have thought the company will mind which account the money comes out of but you will need to keep a note of how much it is as if your parents die it will have IHT complications.

No you shouldn’t allow someone to pay your mortgage on your behalf, the name on the direct debit must match the loan account name.

This could also cause issues at remortgage time etc.

I would set up a separate new account that only does mortgage payments, DP pay in and only mortgage goes out. It won't need any overdraft or similar and if you wanted you could pay x into it as an emergency (I would say equivalent to one mortgage payment so you have security if parents drop a pyt for whatever reason. Parents have security in that the money is sep to any spending funds, the account is in your name and the mortgage pyt still goes out in your name.

However, if you are on benefits etc be careful that this isn't counted as income for the purpose of calculating benefits. Any sort of income including something like this needs to be declared.

In terms of informing the bank thats a tricky one, they may want more details from your parents in terms of income and outgoings and actually recalculate things on that basis.

Good luck sorting it all out.

Thanks everyone. I think my parents were just wondering about the implications of Inheritance tax etc.

Anything your DP's "gift" you now can be considered part of their estate if they were to die within 7 years of giving it.

That's not to say that you have to pay it back, but that it would be counted as part of their estate and an "advance" on your share of your inheritance.

Definitely do NOT do this…

when you come to remortgage, the new lender will want to see bank statements and this set up will ring every alarm bell under the sun

as others have said, better that they pay a standing order into your account a week or two away from the payment coming out, for a similar but not identical amount

If the gifts are monthly gifts out of income and so not reduce their standard of living, they are exempt, no need for the seven year rule. I don’t know whether this would apply, but found this article in case it’s useful.

www.mercerhole.co.uk/wp-content/uploads/2019/07/bn_Gifts-out-of-income.pdf

It is exempt from IHT if it is out of their income

Exactly this!

No need to involve your provider and this is much easier as well as quicker to do.

Depends on your lender, but mine were happy to accept payment of mine from my dads account in the past, so some will definitely allow it.

Also I think you are allowed to get family loans that are not considered gifts. If anyone asks you'll be paying them back in later years.
But see it as a loan from them, they don't legally need to be involved in any part of the house ownership.

Well... as a qualified accountant, I learned something new today! 😳

Can I claim this thread as CPD?!

@WireSkills Do it!