Buying a property is a daunting process. If you have never bought a property before, it can be even more intimidating. A property purchase is usually the largest purchase that a person will make in their life and it is therefore important that you choose a Solicitor who is able to explain the process in simple straightforward language and is available to answer your questions and deal with your concerns.
In relation to the monies from your parents, are your parents gifting the money to you or do they expect the money to be paid back? This is a very important distinction and if you require a mortgage, you will need to make your mortgage advisor aware of the same as soon as possible.
If you are having a mortgage, it is likely that the mortgage company will only be happy to proceed if the monies are a gift. This means that the monies are given to you by your parents with no conditions, the monies will not be repaid to your parents and they will have no interest in the property you are buying.
Your parents will need to produce to your Solicitor and Mortgage Lender a letter confirming that the monies are a gift and they will have no interest in the property. Your parents will also be required to produce identification to your Solicitor as well as evidence as to where the monies have come from.
If you are buying a property as a couple and the monies are to be gifted by one of the parties’ parents, you may want to consider owning the property in unequal shares. Therefore, if you are buying a property for £150k, you are each putting in £50k each and the final £50k is being provided by your partner’s parents, you may wish for your partner to own 66% of the property or for the £50k to paid to your partner on sale before the remaining amount is split between you. Although it is not an easy conversation to have between partners, it is certainly better to have everything agreed and put into writing so that everyone knows where they stand should the property need to be sold.
For this reason, we would always advise that a separate document (known as a Declaration of Trust) be agreed to set out each parties’ share of the property and the way in which any monies from the sale are paid out if the property is sold.
If you are not married to your partner when you purchase a property together, it is also very important to both have a Will. Your Will sets out how you wish for all your estate (including your property) to be passed out if you die.
At Rudlings Wakelam, we have Solicitors who will be able to assist with all aspects of buying your first home, drafting a Declaration of Trust and making Wills for you and your family. If you would like any further information, please do not hesitate to contact us.