Nothing can help you put down a deposit for your first property than a little help from the bank of mum and dad. Last week, we discussed what parents can do and what to consider when gifting their children with money for their first home. This week, we have a handy checklist so that the process of buying a house with your parent’s money runs smoothly.

Tell the relevant people

When you appoint a solicitor to do your conveyancing and more, you need to make sure they are aware of where your money came from. This means, if your parents gave you money for the deposit, they should be made aware. You should also let your mortgage broker know as it can affect the offers you receive. Our next point will help explain why…

Loan or gift

There is a good chance that relevant parties may need details about the money. If it is a gift from your parents, a letter may help clear this up. If it is a loan, then you need an agreement that states how much is being lent, any interest due and the terms of the repayment. The reason this can affect your mortgage is that having another loan to pay may affect the type of mortgage you are entitled to, as well as the property you can afford.

Sort your ID

Your parents, as well as the purchasers, must provide proof of their identity to your solicitor. It is important to check with your solicitor what kind of proof of identification they accept. Once you know this, make your arrangements as soon as possible.

Proof of funds

Anti-money laundering checks mean you will need to provide evidence of where you deposit money came from. This means that your parents will need to provide bank statements that demonstrate how they were able to put that money together.

Legalities

Ask your solicitor to draw up a deed of trust. This will define what will happen to the money in the future. Make sure this covers whether the money must be repaid, as well as what will happen if the property is sold.

Are you ready to buy your first home?

We hope this guide helps you in buying your first home with a helping hand from mum and dad. Remember, if you require a local solicitor to help you through the conveyancing process, Betesh Middleton can help. To learn more about our conveyancing services, get in touch.