Q I’ve got some money in savings that I want to use to help my son buy his first house. The house he has found is valued at £210,000 and he has an agreed mortgage of £168,000. It is my intention to give him the remaining £42,000 as a deposit, plus a little extra for fees.
A friend has worried me by saying that, should my son and his girlfriend split, she would be entitled to half of everything – so, £21,000 of my hard-saved cash. He said that I need to register an interest in this money so that it will be exempt from her share of the house. It seems a bit harsh, but then again, if she is only contributing to the mortgage and not the deposit I think this only fair. The solicitor doesn’t seem keen on this. Is this sound advice?
My son has, today, told me he needs the deposit soon and so needs a letter from me saying I have the funds to give him it (along with a screenshot of my bank account).
JG
A I think that your friend is being a bit of a scaremongerer.
It is not necessary for you to register an interest in the money you are contributing so I’m not surprised the solicitor is not keen. It is true that if your son and his girlfriend became joint tenants of the property, or tenants in common each with a half share of the property, the girlfriend would get half the value of the house if they split and sold it. However, the split doesn’t have to be straight down the middle. So what does surprise me is that the solicitor has not suggested registering the house in unequal shares to reflect your son’s and his girlfriend’s unequal contributions.
Assuming that you don’t want the money you are giving your son back, and assuming that your son and his girlfriend are splitting repayment of the mortgage 50/50, that would mean that your son would have a 60% share and his girlfriend 40%. Those percentages don’t take into account the “little extra” money you intend to give your son for fees, but if that’s only for his half of them, that isn’t a problem.
Finally, just to reassure you: where a parent or other generous adult is providing the cash for the deposit, it is quite normal for the mortgage lender to ask for a letter from the donor and also to see proof that the cash really exists.
