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Can Parents gift equity even thou son-in-law will have mortgage?

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  • Can Parents gift equity even thou son-in-law will have mortgage?

    Hi, my parents bad bought a buy to let property for 245,000 (55k deposit, 191,000 mortgage). They now want to give the property to their daughter (my sister) and her husband.

    They want to give the equity as a gift. So my sister and her husband just need to find a mortgage. My sister has a few glitches on her credit file, however her husband has a good credit score, so they are going to apply to get the mortgage solely on her husbands name; with the house being in my sister's name.

    The thing is a mortgage adviser has said if the parents are gifting her the equity, the house has to be in her name therefore she has also got to be on the mortgage - can't gift equity if the relative isn't on the mortgage.

    Is this true, and if so, any options?

  • #2
    Re: Can Parents gift equity even thou son-in-law will have mortgage?

    Mortgage in husband's name, house in wife's name?
    Your sister is not daft is she?
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    • #3
      Re: Can Parents gift equity even thou son-in-law will have mortgage?

      It's true that the gifted deposit usually has to be a blood relative - however, there is a lender who will accept gifts from in-laws.

      That'll mean the son in law is on the mortgage and hence on the property title deeds and hence owner of the house. Due to his wife's credit score she may not qualify to go on the mortgage and hence not the title deeds and so not own the property jointly.

      In order to secure any kind of rights she would have to take out a deed of trust post completion.

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