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assetrichcashpoor

Bank Of Mum And Dad-Advice Required

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My sister is looking to buy her first home. She hasn't got much of a deposit and my parents are considering supplying the deposit.

They're are thinking of putting up ~10-15%, whilst my sister gets a mortgage for the remaining 85-90%.

Ideally my parents would like to keep the 10%-15% stake, which my sister could then buy them out at the appropriate time or eventually would pass to her as part of her inheritance.

In the current mortgage market is this possible? Would a lender lend to my sister, allowing my parents to retain a stake?

From what I've read online it doesn't seem to be mentioned when it comes to BoMaD.

My parents don't want to gift the money, but don't want to be (and probably wouldn't be accepted as they're both retired) put on my sister's eventual mortgage.

Can people advise what would be best in their opinion for this situation?

Many thanks

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The mortgage company won't allow this as it essentially makes it 100% ltv borrowing against the property.

The lenders will want to see via bank statements where the money has come from, and if it's gifted they will want a signed declaration saying that the person gifting the deposit has no stake in the property. The only way to do it would be informally, which no doublt would lead to arguments later down the road.

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