Gifted enquity or parental loan re: house buying.

[bumpiesonamission]

I need some advice.

I am just about the enter into a retention contract at work which will result in a lump sum at the end of a set period. DH and I were planning to use this towards a house deposit.

DFather has offered to loan us the money next year instead and we will pay him back when I get the bonus.

I have been told that we cannot do this legally and a mortgage company will not loan to us unless it's gifted.

Can someone a. explain why not and b. whether there is any legal way around it?

TIA

The mortgage company won't do it because on paper you have another debt to service on top of their loan.

You can get round it if your FIL trusts you - he gifts you the money, you gift him back a sum in a couple of years. You'd need to check out the capital gains tax liabilities but otherwise I don't see how it could be illegal.

The mortgage company will want FIL to sign a simple letter saying that he has gifted you x amount and there are no conditions to this money.

So even if we had paperwork confirming my bonus?

Your bonus is only if you stay, so the mortgage company is unlikely to accept it

Presumably you could just confirm to the mortgage company that the sum is being given as a gift. You should not then have it as a loan but I doubt the lender will search your house to look for the loan agreement with the father in law. The risk for the father in law though is you divorce and your husband takes half the money and secondly that you are sacked before you get the bonus and never get it.