Can Parents provide deposit for my mortgage?

Can Parents provide deposit for my mortgage?

Can Parents provide deposit for my mortgage?  Yes they can,    firstly before we enter this topic about parents gifting deposits to you, please do abandon all logic and common sense you might hold,  we are about to enter the workd of the mortgage lender and how they view gifted deposits !  – and  different lenders will accept different amounts., we will cover what mortgage lenders might typically allow later.

Why are lenders fussy about what gifted deposit my Parents give me ?

Okay a few reasons here,  a significant factor  is that in previous law cases where a person has been gifted a deposit by their parents,  the person then for whatever reason , loss of job etc,  couldnt afford to make the mortgage payments, and the lenders went to repossess only to be faced with a law suit from the parents claiming that 30% of the equity was theirs,  as they couldnt have been expected to give away £100,000  in cash without any form of return ??   So cases like that have made mortgage lenders understandably cautious.  The lenders want to know that the gift is a genuine gift,  that the parents arent going to ask for a claim in the stake of the property  and that you arent also underan obligation to pay it back  – otherwise they have to factor in what the monthly repayments would typically be and deduct that from affordability.

Another reason, is that lenders might want to see some personal financila commitment from you ! – It’s easy to spend  / or lose someone elses money,  but if you have put at least some of the cash in yourself  then you are more likely to fight to maintain payments and keep the mortgage  – and thats all lenders want a nice easy regular monthly payment of the mortgage.

Can Parents provide deposit for my mortgage?

Yes your parents can provide a gifted deposit, wither if the form of gifted equity – if you are buying their home, or in the form of a gifted deposit – if its cash towards a property.  to qualify  most lenders have a definition of what a family gifted deposit is –  The following would be classed as immediate family members: Mother, Father, Brother, Sister, Child, Grandparent, Grandchild.

 

How much Can Parents provide deposit for my mortgage?

Well this varies from lender to lender,  many will only allow 5%  or 10%  to ensure they dont fall foulf of legal claims later on,  quite a few will go to 25% gifted deposit and a few will go to 50% gifted deposit,  but qute a few want to see some cash being put in by the applicants themselves.

 

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