Can I get my first house using my parents equity?

[Matthew Gibbs 0]

Hello,

 

I am currently renting with my partner and we would like to get our first house together but we are far from a reasonable deposit. My parents have paid off their mortgage and I expect their house to have increased a lot in value since they purchased it.

 

Is there any way we can use equity from their house as a deposit for ours?

If so will we later be able to use equity from our new house to buy an investment property?

 

I have only just started learning about the industry so please excuse any naivety. All suggestions appreciated.

 

Matt

[Scott Elliott 24]

Hi Matt,

If your parents are kind enough to gift you the money .. then why not ... How you document that gift (so lenders know it's not a loan) is one for a broker.

Cheers

[Lucie Wade 3]

Hi Matt

Yes as long as your parents raise the money out of the property for you and 'gift' it to you which means they sign to say they have no interest in the new property, they will not put a charge over it and it is a gift - non returnable then that's fine. Once the property has gone up in value yes you can release this back out again. There's not many that don't take gifted deposits as they are so common now. Hope that helps

[Matthew Gibbs 0]

Thank you for your responses. Can anyone recommend a broker or have tips for finding a good one?

[Matthew Gibbs 0]

 

 

 

Hi Matt

Yes as long as your parents raise the money out of the property for you and 'gift' it to you which means they sign to say they have no interest in the new property, they will not put a charge over it and it is a gift - non returnable then that's fine. Once the property has gone up in value yes you can release this back out again. There's not many that don't take gifted deposits as they are so common now. Hope that helps

 

To follow up...what is actually involved in 'raising money out of the property?' How would it affect my parents/what implications would there be? The house is owned by my Mum (52) and Nan (80). Does it just mean that when they sell the house they receive the money less the amount gifted? Are there fees, tax or interest involved?