To accept this gift from my parents?

[LadyJos]

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?

Take the money, they did not ask for a full income and expediture breakdown from you so it doesn't matter whether you could make it work without their gift. They want to gift it so take it with both hands.

Buy the house without their gift and then use the gift to future proof it.
Decorating
New boiler and central heating
New kitchen and bathroom
Better quality furniture that lasts longer

I wouldn't accept it as a gift though I'd be more comfortable with it as 0% interest loan and you can set this up with a Declaration of Trust with the solicitor dealing with your purchase.

This!!!

But what would she mean “by going without “ ? I’m sure you can go without this gift and buy smaller house in bad condition in unpopular area where school are rated not good and there is higher crimes rates etc etc. or you can take a bigger mortgage and stretch yourself and reduce amount of presents for children for Christmas and birthday and never buy yourself anything and never visit your parents because money is tight and you can’t afford petrol. I’m exaggerating of course but people have different views about “going without “.
I wouldn’t take money if it makes my parents life difficult and restricted. I wouldn’t agree them to sell their house and move into one bedroom flat for the rest of their life but it’s not the case here is it? Also I think it’s very important that they offer the same for you and your sibling so it’s fair.
I would think about how comfortable your parents would be after giving away this amount of money ( for both of you) it would be my main concern. If there is no problem here - it’s fine.

By the way what do you mean by “she thinks about money in a moral way” ? Does it mean there are any sort of moral strings attached to this gift?

Anyway OP, this 40K is definitely a gift not a loan right? Why not add that to your deposit and make it easier on you? Unless there's some background story regarding you and your parents; surely this is a no brainier?

I would accept this gift graciously and reframe the narrative that your dad is generous and your mum (the one who is also giving you 40 grand 🙄) is 'tight' . That way resentment lies for the future....

You won’t need to pay tax on a gift in the U.K. I gifted my daughter more than this amount for a deposit and no one had to pay tax. She may have to pay tax on it if I die within 7 years but hopefully I won’t. It was all done legally through the solicitor she used to purchase the property.

Nobody cares about a holiday. It's not what the money is about. The issue is not how OP can afford to go on holiday.

OP is asking if she should accept the gift when she thinks she could manage the house purchase without it. The consensus is that she should, just use all the money for the house purchase because that's the purpose of it. Holidays and how to afford them are completely outside the scope of the discussion. OP isn't asking how she can go on holiday.

Your DPs don't need to know the ins and outs of your financial situation just because they're chipping in, OP.

If they can easily afford it, take the money and enjoy a bit of relief from the financial buffer it givers you.

@Spirallingdownwards

she didnt say it would, she asked will it? Her parents are not you.

Definitely take it, buying a house comes with loads of expenses. Pay it forward for your own kids in years to come.

Why not take what you feel you need, say half and explain you've saved. That's honest.

Definitely accept, they are trying to make your lives easier. Far better for everyone than having unneeded cash sitting in the bank.

Also OP, what about furniture & appliances? Did you already budget for that? Honestly; again, take the money.

Take the very generous gift. Save the difference it will make on your mortgage payments to build up a nice reserve in case of difficult times. Honestly I think this would be the best thing to do especially if your mum worries about money, it would mean you were more financially secure going forward taking the gift, than struggling without it.

Take the money. Don’t do the holiday idea!

Doing without this gift would presumably make life a bit tighter for your family? I would just accept it as a way to buy a house and not struggle. There are always hidden costs so the money will be really useful.

Well, you could obviously do without it and continue to rent. If she's happy to give you the money and is giving the same to your sibling, then that's great. If it'll make your mortgage more affordable then that's really great as it'll mean your finances will be more stable for years. Will you get a better interest rate now, too, with a bigger deposit? There was good news about interest rates in the news today so all this has happened at the right time.

I think you should accept it - you don't have to lie because you don't need to discuss everything with them. Have a deposit as big as you can to cut down payments, you'll also need money for fees etc. But don't take them on a holiday as a PP suggested, that's ridiculous! I'd be really disappointed if I gave my DS 40k for a deposit and he blew 10k on a holiday for us!

Someone else suggested it, not me. And a holiday was written off as a waste. I don’t agree it’s a waste.

Agree with @simonsez - if parents give you money for a house I imagine they would be very put out if you blow it on a holiday.

@simonsez was the (only) one who suggested treating them to a holiday. I don't think you meant to agree with them!

Meanwhile when my parents offered us money and we said we didn’t need it they gave it to us anyway and told us to go on holiday. Which is exactly what I would do.

No one knows how their parents will react and whilst agree on being upfront to suggest a holiday is a waste is weird to me.

It isn’t the case that parents only gift if without it, buying would be impossible. It also isn’t the case that gifting should only happen at a level so that the maximum mortgage is still required. Gifting often happens simply to make things a bit easier for the recipient.

This gift can be used to enable you to pay as big a deposit as you can afford, whilst still leaving you enough to get started in the new home or have a small amount of savings. You don’t have to be totally wiped out. In fact that would be foolish as things always crop up.

Yes, check your parents can afford it and are happy to give you the money. If so, receive it gratefully and then make choices to give yourself a better future. Remmeber buying has lots of extra costs such as stamp duty invovled in it. Persoanlly, if at all possible, I’d put down as big a deposit as I could to enable possibly a lower interest rate but also the fact that the bigger the deposit the less you will pay monthly and hopefully for less years. I’d keep a couple of £k for emergencies but wouldn’t be keeping lots for decoration, furniture etc. In my mind, new buyers live with their old stuff and wait to do decorating etc for a few mo this until they have saved some more cash. First time buyers paying a smaller deposit but keeping lots back for furniture etc seems a mistake. The more you borrow the more it costs over the years, so keeping the amount you borrow to the least you can manage with what you have already is a good sue of the money.

She does actually, given it's half her money.