mortage loan

[SnowWhite26]

We are borrowing money from parents for a mortage whixh we will repay.Is it ok to say its a gift to bank for ease and then pay parents back slowly?

I would imagine so, if it is unsecured

You might have to do that as mortgage company may not advance the amount you need if they think you have another loan

Some friends of ours did this with their daughter and the mortgage company wanted a proper, legal, signed document confirming it was a gift despite them having a good deposit, etc

Yeah well my parents will have to sign to say its a gift but we will still pay them back slowly.You think thats ok?

What protection do your parents have? Is there anything written making it legally a loan? Saying that you actually have to repay them the money?

There would be trouble in the case of what happens if you split with your partner etc... if your partner has a bit of paper legally laying down the loan as a gift, then they can walk away from it - leaving you with the pieces to pick up etc...

If there is nothing legally calling it a loan, then you can tell the mortgage company it is a gift, they will ask for bank statements up til they offer you the money - so you need to make sure no repayments are made until that date.

if you ever want the mortgage extended, renewed etc. you will have to explain any regular payments. You also have to be sure that your parents will be happy to sign a statement saying it is a gift when quite clearly it is not - i.e. making a fraudulent statement.

It is frustrating because they make it so difficult.

In our friends' case, their DD had a good deposit and would have been approved for the full balance of the mortgage based on income, etc. Her parents offered a sum from their savings as they were getting nothing worthwhile in interest and it would reduce, not just her monthly repayments, but also the interest rate payable. Even if she repaid her parents at the same rate as the mortgage company it would have been affordable yet they insisted it had to be a gift

I'm guessing you mean the money from your parents is for the deposit and you are borrowing the rest from a bank/ building society on a mortgage.

If that is the case your parents will have to declare it as a gift in writing to the solicitor/ lender.

What you privately agree is up to you but legally your parents wouldn't have a claim on that money ever again.