'Gifted house deposit from father-in-law was too good to be true'

Can you tell me a bit about you, your life and your relationship?

I live with my husband, our newly adopted daughter, and our dog and cat. We own our previous home, but it's no longer suitable as my husband is now a wheelchair user, so now live in a rented bungalow during his ongoing personal injury claim.

The home we own was made possible because my father in law (FIL) offered to gift us the deposit and the fees associated with the purchase. However, when it came to parting with the money, it didn't happen as we had expected.

Can you tell us more about what he offered?

My husband's father offered us £20,000, which would afford us the full deposit to buy the house and some money towards the fees. We were living with friends at the time and had overstayed our welcome, so were greatly excited that our next move could be into our first home! We kept my FIL updated with all the house progress, and he signed a letter to our solicitor advising that he was gifting the money.

What happened then?

When it came to transferring it (after we had exchanged those contracts), issue after issue came up about why he couldn't. Whilst my FIL is an accountant, he didn't realise the money in his pension wasn't as accessible as he first thought. He asked to pay part of the money promised - £10,000 - and then for us to take out a loan for the other half, which he would then pay in monthly instalments. I asked why he couldn't take out the loan himself, but apparently he had a bad credit score.

Can you describe the feelings that were involved?

I felt infuriated that my FIL waited until we couldn't pull out of the house purchase to tell us he couldn't gift us all the money he had promised. It caused serious arguments between my husband and I at the time; we were both disappointed, but my husband felt that he needed to stand up for his dad and remain grateful as he had still gifted us a large amount of money. At the time I wished I hadn't gone through with the purchase at all, but in hindsight it did allow us to buy our first home.

Did your FIL pay it all in the end?

No, my FIL didn't pay all the loan back, and when he got pretty late with a lot of the payments a year or so into the three year loan arrangement, we were fortunately in a position to pay off the loan ourselves.

How do you feel about it now?

It did leave a sour taste in my mouth for a good few years, but now I have somewhat got over it. Having our first home is a hugely privileged position to be in, and so I'm mostly grateful to my FIL for giving us that opportunity, even if it was incredibly stressful at the time. I am careful with taking on any gifts from him again though.

My husband and I are three years into a complex personal injury claim, and I hope it will settle in the next 2+ years, after which we can look forward to buying our forever home - fully adapted for all my husband's future needs.

Do you have any advice for those where you were?

Borrowing or gifting money to/from family and friends can destroy relationships. If you can't afford to be without the money at some point in the future, don't offer to lend it.

Financial Confessions