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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To accept this gift from my parents?

261 replies

LadyJos · 04/01/2024 14:40

My parents have very kindly offered to gift us 40k towards buying our first home. We are in our forties with two children and have of course worked hard for about 15 years to save a deposit.

After looking carefully at our finances, it seems we might just be able to buy a house without this 40k, although it would mean other financial sacrifices to make that happen and would make the our mortgage very expensive (although not unaffordable).

I feel I should come clean to my parents and tell them we may be able to make it work without this gift after all. If it were just my dad, I think he would offer the gift (or some of it) anyway. However, if my mum has this information she’ll want to withdraw it all together as she is very tight about money.

They are very well off but not to a ridiculous extent. My husband and I both work hard in good professional jobs. I’m really morally torn over whether to take the gift and make my family’s life financially easier or to explain that it might not be necessary, and lose the gift. AIBU?

OP posts:
HighQueenOfTheFarRealm · 06/01/2024 00:16

Well, this gift is the difference between struggling a bit and being comfortable. We don't know how many more increases there will be to our food, utilities, fuel and mortgage rates so accept it with thanks and provide a great home for your family.

WombatChocolate · 06/01/2024 12:26

OP, only you know (or can work out by asking them) if this is a gift being offered purely because they think that without it, you wouldn’t be able to afford a house, or if it’s being offered simply to make life a bi t easier for you.

Many parents will gift to their children, when it’s not a case of them not being able to live or buy a house without the gift. Many parents have some money and get enormous pleasure from seeing their children enjoy it and get the benefit of it whilst they are alive. Most people dont take the view that children must stand entirely on their own 2 feet and that a gift can’t be given or received unless the situation is dire and managing alone isn’t possible.

But OP, you are clearly worried about your parents’ attitude to the gift and to money. I think for your own peace of mind, you need to clarify the situation with them. It is irrelevant if other people’s parents would happily gift if you didn’t need the money for they would graciously accept regardless - this is about your family and their response to money.

So, go back to your family. Start by thanking them for their generous offer. Tell them you’d love to accept it. Tell them you want to check a couple of details and makes sure everyone is on the same page. Check first they can afford to give you the money and it has no strings attached. Then tell them that the money will make a big difference to you and that it will mean you can get a better interest rate and need to borrow a bit less. Tell them that without the gift you could stretch to buy with a worse interest rate and bigger loan, but you want them to know that you are able to stretch to do it yourselves. Again, thank them and just confirm that they are happy to gift the money. Then confirm the details of when and how the money will be available.

This last thu g about when the money will be available and in what form is important. On other threads, misunderstandings happen where parents say money will be gifted, but without clear timescales. Sometimes children think it will be soon but parents had no specific timescale and this causes problems later.

To be honest, communication is really important about stuff to do with money. People don’t like talking about it, make assumptions and misunderstandings develop. Always best to speak it all out and ensure you’re on the same page.

I’d hope that your parents confirm that they can afford to gift the money and do it with pleasure even if you can afford to buy without them. And that you can accept it happily and graciously and it gives all of you much pleasure. What a joy to be able to do this for your child and to receive like this as a child. Not everyone can afford to do it,but for those who can, it’s such a blessing.

laclochette · 06/01/2024 12:46

It sounds like it would make a very meaningful difference to you to accept the gift even if it is technically possible for you to buy without it. It could end up saving you tens or even hundreds of thousands of pounds over the course of your mortgage depending on the sums involved due to less debt and a better LTV giving you access to better rates.

Eg £300,000 borrowed at 5% over 25 years = total repayments of £526k

But

£260,000 borrowed at 4% over 25 years = total repayments of just £412k!

Just plucking these figures out the air to illustrate how £40k in capital can save £114k in repayments. So in this example you could say it isn't really a gift of £40k. It's a gift of £114k to you, at a cost of £40k to them! Talk about an amazing deal.

That is a huge sum of money to turn down. Think of the difference it will make to your family - whatever the actual sums are involved for your purchase.

BrightGreenMoonBuggy · 06/01/2024 12:56

Why not accept part of it? Say £20k?

LadyJos · 06/01/2024 15:45

This is probably the most helpful response, thank you so much!

OP posts:
Dynababy · 06/01/2024 16:44

If your parents are very comfortable and have this money to gift without sacrifice on their behalf take the gift. You don’t need to go through the ins and outs with them to justify it. Accept and say thank you very much you’ve made our lives a lot easier. In your forties and just on property ladder £40k might make a difference to allowing you a slightly shorter mortgage term and therefore a reasonable retirement age.

Luddite26 · 06/01/2024 18:30

They know you have been saving 15 years they want to help. Stop complicating it and accept the money please and find your new home.

Jack80 · 06/01/2024 19:35

Take the money, they want to help you. Why should you sacrifice and have a higher mortgage, when you can use the money given and your parents will be proud they have helped.

ChellyT · 06/01/2024 23:42

Yes, take the gift and use it to put towards the property as your parents intended you to.

Yazo · 07/01/2024 00:28

Take it, houses end up more expensive than you think when you move in. If you have siblings I bet they'd gladly have it and more instead

angela1952 · 11/01/2024 15:11

We've recently downsized and given all of our children money to help them to move from their first homes to their second. We've also lent them some to help them with renovations, and expect them to pay this back a.s.a.p. If they had taken out mortgages to fund their moves the repayments would have been eye-watering and the compounded interest payments over the full term were unbelievable.
I keep quiet about it with friends because most of them have the view that children should pay for everything themselves, but we figure that if we don't hand it over now it's likely that 40% of it will go in IHT. Also we'd much rather they have it now so that we can see them enjoy it, at a time of their lives when they really need it. If they inherit when we die they won't need it so much.
We had an interesting conversation with one son the other day who said that he plans to downsize when he retires so that he can do the same for his children, whether or not IHT has been abolished.

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