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  • FIRST POST
    clive80
    Gifted deposit question
    • #1
    • 8th Apr 12, 9:45 PM
    Gifted deposit question 8th Apr 12 at 9:45 PM
    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.
Page 2
    • Thrugelmir
    • By Thrugelmir 9th Apr 12, 5:13 PM
    • 49,987 Posts
    • 41,634 Thanks
    Thrugelmir
    yes it will be in my name, but with our baby and my partner declared living with me.
    Am I right in thinking there will be no need to credit check her?
    Originally posted by clive80
    She is connected to you. If your child even more so. As there's a financial connection.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
  • clive80
    She is connected to you. If your child even more so. As there's a financial connection.
    Originally posted by Thrugelmir

    Hang on. But she is not borrowing any money form the mortgage lender.
    When I have made other credit agreements such as mobile contract, utilty bills, sky, all in my name they have not credit searched my partner.
    • Thrugelmir
    • By Thrugelmir 9th Apr 12, 5:25 PM
    • 49,987 Posts
    • 41,634 Thanks
    Thrugelmir
    Hang on. But she is not borrowing any money form the mortgage lender.
    Originally posted by clive80
    One you declare her to the mortgage lender then the question will be why isn't she on the mortgage. As normally you would expect this to be case. Whether she financially contributes to the mortgage at the date of application is of no consequence.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
  • clive80
    The answer will be the honest one which is her credit file/rating is awful.
    if we were to try a joint application we would not clear the first hurdle!
    I am aware that this would then make my partner and child be classed as dependants.
    This of course means I could borrow less, which according to direct online calculators shows I can still borrow enough, which is fine.
    • Thrugelmir
    • By Thrugelmir 9th Apr 12, 5:56 PM
    • 49,987 Posts
    • 41,634 Thanks
    Thrugelmir
    The answer will be the honest one which is her credit file/rating is awful.
    if we were to try a joint application we would not clear the first hurdle!
    I am aware that this would then make my partner and child be classed as dependants.
    This of course means I could borrow less, which according to direct online calculators shows I can still borrow enough, which is fine.
    Originally posted by clive80
    Dig yourself a hole if you wish. Not advisable as you may find yourselves blacklisted for credit for a very long time. All major lenders are members of National Hunter . Application fraud and intentional deception is taken very seriously.

    http://www.nhunter.co.uk/
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
  • Simon gloster
    You'll need to do your homework via the cml website. Vendor gifted deposits are generally a no no.

    Its like you say, shes not your MIL, so it's just like me giving you the money, technically.

    Its a question the lender will ask but most of the ins and outs are done by the solicitor. If you want to say 'gift' and no questions asked, its for you to deal with of comeback happened.
  • shop-to-drop
    Would it be better to jointly buy the house with future MIL?
    Trytryagain FLYLADY - SAYE £700 each month Premium Bonds £713 Mortgage Was £100,000@20/6/08 now zilch 21/4/15 WTL - 52 (I'll do it 4 MUM)
  • clive80
    MIL would be too old to go on the mortgage!!

    Really suprised that this is such a frowned upon situation, its not as if we are telling a lie to lenders.

    Is it worth speaking to a few of the big high street lenders in local branches to see what they say?????

    Have any brokers on here had a similar scenario to this???
    Or anyone else???
    • Thrugelmir
    • By Thrugelmir 9th Apr 12, 6:48 PM
    • 49,987 Posts
    • 41,634 Thanks
    Thrugelmir
    Really suprised that this is such a frowned upon situation, its not as if we are telling a lie to lenders.
    Originally posted by clive80
    Not frowning nor playing games. Merely attempting to offer adult advice.

    "Misrepresentation is a contract law concept. It means a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract."
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
  • Simon gloster
    MIL would be too old to go on the mortgage!!

    Really suprised that this is such a frowned upon situation, its not as if we are telling a lie to lenders.

    Is it worth speaking to a few of the big high street lenders in local branches to see what they say?????

    Have any brokers on here had a similar scenario to this???
    Or anyone else???
    Originally posted by clive80

    I've agreed cases like these in the past, but declined a lot more. Reason...i wanted the person gifting the money to waive any righs in terms of repo and wanting their money back.

    I dont understand either your stance on it Clive. At the end of the day its not your money you want to borrow. Think of it s you are the lender and the most worse ase scenario on that app. Would you give them the money? Your situation may be different but they have to draw the line somewhere.

    Also can you 100% guarantee it'll be happily everafter for 40 years.....of course not.
  • clive80
    Is it worth us speaking to a few of the main high street lenders in branch then to see what they say???

    Can I be clear here because it seems someone has got the wrong end of the stick, we are not attempting fraud or anything, our application will be honest and open, we are not attempting to cover anything up.

    many thanks
    • Yorkie1
    • By Yorkie1 9th Apr 12, 7:51 PM
    • 11,014 Posts
    • 20,568 Thanks
    Yorkie1
    You say you aren't attempting fraud, but you're potentially not telling the truth to the lender if you say the money is your savings / your OH's savings.

    That isn't the truth - neither you nor your OH has saved that money at all. It may have sat in your savings account for a number of months, but 'saving' is a concept which demonstrates an ability to set aside money from income over a period of time. This £40K is not saved by you; it's a gift from someone who is neither on the mortgage, nor related to someone who will be on the mortgage. To say it is savings is misrepresentation at best and potential fraud at worst.

    Have a look at this thread which is not on all fours with your situation but has some elements of overlap.

    It feels to me - and I might be wrong - that you want us to tell you it's OK to tell the lender whatever you want in order to get the mortgage; but I can't do that.
  • clive80
    Just to be clear. We would state that it is a gifted deposit.
    Not savings. I dont recall saying I was going to tell a lender I had saved this money!??! If I did it was a mistake!!
    Many thanks
    • Yorkie1
    • By Yorkie1 9th Apr 12, 9:08 PM
    • 11,014 Posts
    • 20,568 Thanks
    Yorkie1
    It's possible I misunderstood - apologies if I did!
  • clive80
    chinese whispers springs to mind!
  • Simon gloster
    MIL would be too old to go on the mortgage!!

    Really suprised that this is such a frowned upon situation, its not as if we are telling a lie to lenders.

    Is it worth speaking to a few of the big high street lenders in local branches to see what they say?????

    Have any brokers on here had a similar scenario to this???
    Or anyone else???
    Originally posted by clive80
    Just to be clear. We would state that it is a gifted deposit.
    Not savings. I dont recall saying I was going to tell a lender I had saved this money!??! If I did it was a mistake!!
    Many thanks
    Originally posted by clive80


    Thats fine then. The gifted deposit is what it is. Lenders, as you have posted Clive, and also what I responded to, will want the gift from close member of one of the applicants and be non repayable. That is what this ia all about, how a lender defines a gifted deposit. End of.
    Last edited by Simon gloster; 09-04-2012 at 9:19 PM.
    • kingstreet
    • By kingstreet 10th Apr 12, 10:14 AM
    • 29,644 Posts
    • 15,716 Thanks
    kingstreet
    However partners mum has given her 40k as a deposit...

    ... So my QUESTION IS do lenders frown upon/ decline gifted deposits from a partner who is not named on the mortgage???
    Originally posted by clive80
    You are going to struggle on two fronts.

    The first is the gift is from a non-family member. This will not be acceptable to many lenders.

    The second, if the money is in your partner's name you'll fall foul of lenders like Abbey/Santander's stance which prohibits acceptance of a gifted deposit from someone who will live in the property who won't be party to the mortgage;-

    Proof of deposit
    We may request proof of deposit, for example if a First Time Buyer was putting down a large deposit. We always require evidence of the deposit where it is £100,000 or more and is not coming from the simultaneous sale of a borrower’s existing property.

    We can accept deposits provided by gift or loan.

    We will not accept a gifted deposit if:

    provided by the vendor (unless an acceptable new build incentive from the builder/developer);
    protected by a Deed of Trust (or similar);
    the person providing it will be living in the property, but is not named on the mortgage; or
    there is a beneficial/equitable ownership/interest in the property.
    I believe the best approach to this situation is to chuck it at a good independent or whole market broker to see what they can come up with.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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