Gifted deposit question

clive80 · 8 April 2012 at 9:45PM

Hi.
I have just come across this site and i am looking for some help with my/our future mortgage application.

Situation is as follows.
We currently rent but want to buy.
I earn 23k a year, very clean credit file, no credit cards, loans or other commitments.
My partner who has just had a baby does'nt obv work, but has a terrible credit history. Had several defaulted debts in past and a ccj or two, have all been paid within last year, so as I understand it come 6 years will be clean.
However partners mum has given her 40k as a deposit.
Have been looking in paper a properties valued at around 125k.

I know that we have no chance of a joint application and if by chance we could get approved we would be on a terrible rate i should imagine.
So my QUESTION IS do lenders frown upon/ decline gifted deposits from a partner who is not named on the mortgage???
i.e a sole application in just my name.

Many thanks.

ACG · 8 April 2012 at 10:15PM

Im not sure they would accept it.

What you could do though is put the deposit in your bank account, in 3 months time make an application....they will only ask for 3 months bank accounts (usually) so you can say the deposit came from savings rather than a gift.

clive80 · 8 April 2012 at 10:32PM

We did consider that as an option.
But what if they asked for older statements and I was then found out to be telling a porky? Would hate to have exchanged contracts, hand over 10% deposit then lose it when the lender backs out after they found out the truth!!!!!
Honesty is surely the best policy?

FraudBuster · 8 April 2012 at 10:47PM

ACG wrote: »

Im not sure they would accept it.

What you could do though is put the deposit in your bank account, in 3 months time make an application....they will only ask for 3 months bank accounts (usually) so you can say the deposit came from savings rather than a gift.

Mortgage Fraud.

If the application came from an intermediary, other applications made by the same firm are also verified for inconsistencies or patterns. Intermediaries found to be committing or countenancing fraud could be both struck off that lender's panel of intermediaries and reported to the FSA or other authorities.

http://www.cml.org.uk/cml/policy/issues/3658#b

clive80 · 8 April 2012 at 10:52PM

Fraud, really.
Back to the original point.
Which lenders would accept a gitfed deposit from a partner not named on the mortgage???
Any brokers out there or people who have been in a similar position???

Many thanks

ACG · 8 April 2012 at 11:11PM

This came up in a post earlier today....at what point does a gift become savings. How long do you have to have it before it becomes savings.

Personally i wouldnt be happy processing it for a client as savings. I would usually insist it went down as a deposit, but the point does remain.

Larna · 9 April 2012 at 8:09AM

Does the Mother have all the facts? Can she be happy to give such a large amount to purchase a property that will not be in her daughter's name, and risk losing the lot?

Lbarn · 9 April 2012 at 8:09AM

Hi Clive,

For now I would just get it in savings, and keep any statements in MIL name showing transfer to your account.

We have just had a gifted deposit and so far seller (bank as a repo) have only asked to see proof we had the deposit not where it came from.
We have declared it to our mortgage lender, but again they haven't asked for proof just the name of my father.

However to ensure we have all sufficient evidence, my mum has printed off statements showing balance, then transfer going out - printed a copy of Chaps transfer and ive got a statement showing it coming in. My mum has also done a signed letter to say they have given as this money as a pure gift NOT A LOAN and at no point will ever ask for the money back and have no interest in the property.

God knows if we have done it right, im going to ask my solicitor next week but we wanted all bases covered.... as I said no one has really asked for more info????

Good luck getting your house, what a fabulous gift from your MIL!!

clive80 · 9 April 2012 at 9:25AM

Hi.
Just to clear up, we are not married, if that makes any difference so she is not yet my MIL. The money for deposit has been in my partners savings account for a couple of months now.

Anyone help????

Do lenders get funny about deposit gifted from partner not named on mortgage????

Is this quite a straight forward case??

If my partner was to transfer money into my savings account how long would it be until her gift could become classed as my savings?????

Many thanks.

Lbarn · 9 April 2012 at 12:15PM

If your partner is gifting to you as mortgage in your sole name and she is obviously going to live in property then she would have to legally declare she would have no interest in that money or the property in the future.

Someone on here will confirm but in my opinion your better having gifted from her mother not your partner gifting as otherwise your partner will be left completely exposed and unprotected should anything happen.

Relationships do breakdown and they need to decide if mother and daughter can sign away 40k

clive80 · 9 April 2012 at 3:20PM

Hi.
Yes we are aware that she will have to declare that she has officially no interest in the property.

Deciding wether or not to gift the money is not an issue.

Gifted deposit question

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