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Buy to Let Property in UK- Seeking help from Family Memeber for Deposit

Buy to Let Property in UK- Seeking help from Family Memeber for Deposit

Old Apr 27th 2019, 6:57 am
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Default Buy to Let Property in UK- Seeking help from Family Memeber for Deposit

Hi All,



As always I hope someone will be able to assist with this post.

I have been in touch with various lenders to buy an investment property in UK using a BTL mortgage. The rate of interest is quite high (approx. 3.5% to 4.5%) and comes with high procurement cost. To reduce the amount of mortgage from the Lender, I am considering increasing the deposit amount (in additional to what I have) by taking some extra pound from my sister who lives in the US. This will reduce the cost of mortgage (such as product fee, etc) and monthly interest amount. While my overall financial liability will not change with this arrangement however, it will open the opportunity for early repayment to my sister. Usually, lenders charge high fee for early repayment (approx. 3-4% of the loan value) for the mortgage period.

For Residential Mortgage in UK I know my friends have sought help from family members for additional deposit but would this arrangement be acceptable for an Investment Property.

Any advice will be appreciated.
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Old Apr 28th 2019, 6:45 am
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Default Re: Buy to Let Property in UK- Seeking help from Family Memeber for Deposit

From my own very limited knowledge, I would imagine any lender will want to know the source of these funds, if you declare that the funds are being added to by a third party ( your sister ) . There is usually a signed declaration by the third party stating the basis of the funds - ie a gift, a loan etc and if they will retain any interest in the property. Otherwise, just get the additional money from your family so it's in your bank account. They might not need to know where it came from / how you acquired it. All part of Anti Money Laundering.

I would imagine others will be able to advise you better.
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Old Apr 28th 2019, 8:36 am
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Default Re: Buy to Let Property in UK- Seeking help from Family Memeber for Deposit

Originally Posted by nottmbantam View Post
From my own very limited knowledge, I would imagine any lender will want to know the source of these funds, if you declare that the funds are being added to by a third party ( your sister ) . There is usually a signed declaration by the third party stating the basis of the funds - ie a gift, a loan etc and if they will retain any interest in the property. Otherwise, just get the additional money from your family so it's in your bank account. They might not need to know where it came from / how you acquired it. All part of Anti Money Laundering.

I would imagine others will be able to advise you better.
The above is spot on - i had to sign a declaration that i was gifting the money to my sister for her to buy a property and that i would have no interest in the property before the mortgage was accepted
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