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  • FIRST POST
    • louiserer
    • By louiserer 11th Feb 10, 8:41 PM
    • 134Posts
    • 13Thanks
    louiserer
    Proof of deposit - Mortgage
    • #1
    • 11th Feb 10, 8:41 PM
    Proof of deposit - Mortgage 11th Feb 10 at 8:41 PM
    Hi All,

    I am currently in the process of buying my first house,

    I have been told that I will soon have to supply proof of my deposit, I think this is to the solicitors.

    I am just wondering, why do they need this proof? Also, will I just need to supply a bank statement showing the money in my account?

    Thank you,

    Lou
Page 1
    • G_M
    • By G_M 11th Feb 10, 9:13 PM
    • 37,008 Posts
    • 40,929 Thanks
    G_M
    • #2
    • 11th Feb 10, 9:13 PM
    • #2
    • 11th Feb 10, 9:13 PM
    Who has asked for the proof? The estate agent? Your mortgage provider? Your solicitor?

    Whichever, it is not unreasonable for them to want to know
    a) you can genuinly proceed with the purchase and
    b) you are not a drug trafficer laundering your ill-gotton gains

    Bank statement will probobly do. may need to show where it came from (2000 deposits of £20 each in cash may raise eyebrows, as would a large deposit from Venezuela)
    • Radiantsoul
    • By Radiantsoul 11th Feb 10, 9:14 PM
    • 1,971 Posts
    • 1,970 Thanks
    Radiantsoul
    • #3
    • 11th Feb 10, 9:14 PM
    • #3
    • 11th Feb 10, 9:14 PM
    Yeah that will be fine.
  • jenny_13
    • #4
    • 11th Feb 10, 9:31 PM
    • #4
    • 11th Feb 10, 9:31 PM
    You normally need to show where the money has been for the last 3 months. If it's coming from different sources you'll need to provide statements for each of them.
    • louiserer
    • By louiserer 11th Feb 10, 9:38 PM
    • 134 Posts
    • 13 Thanks
    louiserer
    • #5
    • 11th Feb 10, 9:38 PM
    • #5
    • 11th Feb 10, 9:38 PM
    Most of the money has been borrowed in a loan. My mortgage advisor knows I have the loan and what the monthly payments are, my mortgage has all gone through fine.

    Are the solicitors going to have a problem with this?
  • jenny_13
    • #6
    • 11th Feb 10, 9:40 PM
    • #6
    • 11th Feb 10, 9:40 PM
    Do you mortgage company not have a problem? Normally they won't lend to you if the deposit comes from a loan as you need to pay that back as well as the mortgage.

    I don't think the solicitors will have a problem as long as you show the correct documents.
    • getmore4less
    • By getmore4less 11th Feb 10, 10:00 PM
    • 26,235 Posts
    • 15,783 Thanks
    getmore4less
    • #7
    • 11th Feb 10, 10:00 PM
    • #7
    • 11th Feb 10, 10:00 PM
    Do you mortgage company not have a problem? Normally they won't lend to you if the deposit comes from a loan as you need to pay that back as well as the mortgage.

    I don't think the solicitors will have a problem as long as you show the correct documents.
    Originally posted by jenny_13
    If you have any other debt then whatever deposit you have is no different to a loan. (net position is the same)
    • louiserer
    • By louiserer 11th Feb 10, 10:05 PM
    • 134 Posts
    • 13 Thanks
    louiserer
    • #8
    • 11th Feb 10, 10:05 PM
    • #8
    • 11th Feb 10, 10:05 PM
    If you have any other debt then whatever deposit you have is no different to a loan. (net position is the same)
    Originally posted by getmore4less
    sorry, I'm all new to this, what does this mean?
    • MarkyMarkD
    • By MarkyMarkD 11th Feb 10, 10:13 PM
    • 9,799 Posts
    • 4,216 Thanks
    MarkyMarkD
    • #9
    • 11th Feb 10, 10:13 PM
    • #9
    • 11th Feb 10, 10:13 PM
    The point isn't whether the mortgage adviser knows about the loan. The point is whether the mortgage application included you fully disclosing the loan.
    • Fire Fox
    • By Fire Fox 11th Feb 10, 10:15 PM
    • 23,851 Posts
    • 27,065 Thanks
    Fire Fox
    Most of the money has been borrowed in a loan. My mortgage advisor knows I have the loan and what the monthly payments are, my mortgage has all gone through fine.

    Are the solicitors going to have a problem with this?
    Originally posted by louiserer
    Very few lenders will accept a loaned deposit, are you sure this has been declared to the lender properly?
    What a difference a day makes, twenty four little hours.
  • lellow lorry
    A loan should be declared....would show on a credit check anyway...however depends what the loan was for initially for it to raise a mortgage companies eyebrows. A friend of mine borrowed about 20k for a new car.....bought it, but still had his original car which was worth a similar amount which he sold. No fraud there but nearly 20k in the bank for a deposit. Fine if affordable
  • cashorcheque
    What about if the same guy had bought the car for £20k, and then sold the same car the next day for £20k? Would that be fraud?
    • Fire Fox
    • By Fire Fox 14th Feb 10, 2:56 PM
    • 23,851 Posts
    • 27,065 Thanks
    Fire Fox
    What about if the same guy had bought the car for £20k, and then sold the same car the next day for £20k? Would that be fraud?
    Originally posted by cashorcheque
    Clearly there was no intention to actually own a car, you are just buying a car to cover your tracks! Bordering on money laundering never mind fraud. You would still have to declare the loan on your mortgage application, in which case the lender would do some basic maths.
    What a difference a day makes, twenty four little hours.
  • Radsteral
    well that guy had to do something in order to get a morgage i guess.
    Some of you here are behaving like proper comusnists, forgeting that the banks themselves arent as clean behaving
    sample
    me deposit 10 percent -- bank says that i didnt pass their credit score
    me that very same evening going for 25 percent deposit = passing their credit score with flying colours.
    i thought credit score was mainly to verifyt if applicant been ok throughout to pay bills etc
  • cashorcheque
    Fire Fox - I think you muddle my legal question with a moral one. It's perfectly possible to buy a car, think you've made a mistake, and sell it on. People do it all the time. I was (and I was only asking) asking what constitutes legal fraud, not to define what counts as a genuine intention or not.
  • uk property expert
    Firefox is correct.
    Most building societies will only lend to you if you either have saved the deposit, you have raised capital by leveraging another asset or if you borrow the money from a family member and they do not want it back. Look at your ts and cs on the mortgage application form. They especially bm track back the money to its source hence their question they have asked your solicitor
    • Fire Fox
    • By Fire Fox 14th Feb 10, 3:19 PM
    • 23,851 Posts
    • 27,065 Thanks
    Fire Fox
    Fire Fox - I think you muddle my legal question with a moral one. It's perfectly possible to buy a car, think you've made a mistake, and sell it on. People do it all the time. I was (and I was only asking) asking what constitutes legal fraud, not to define what counts as a genuine intention or not.
    Originally posted by cashorcheque
    If you ask enough people someone will tell you it is fine to break the law. I am not addressing a moral issue as I don't have any desire to 'protect' big business, I have a desire to not encourage an otherwise law-abiding citizen to commit fraud. If your fictional person genuinely intended to purchase a car they would sell the mistake and buy another OR use the money to pay back the car loan. Proving intention is a very large part of practicing law so it is highly relevant to your query.

    "No precise legal definition of fraud exists; many of the offences referred to as fraud are covered by the Theft Acts of 1968 and 1978. Generally, the term is used to describe such acts as deception, bribery, forgery, extortion, corruption, theft, conspiracy, embezzlement, misappropriation, false representation, concealment of material facts and collusion. For practical purposes fraud may be defined as the use of deception with the intention of obtaining an advantage, avoiding an obligation or causing loss to another party.

    Obviously persons outside as well as inside the University can perpetrate fraud. The criminal act is the attempt to deceive and attempted fraud is therefore treated as seriously as accomplished fraud."
    http://www.internalaudit.bham.ac.uk/audit/fraud.shtml
    What a difference a day makes, twenty four little hours.
  • needo19
    Mortgage Deposit
    hi,
    I am first time buyer and buying a house for 96000. My mortgage was refused as I wanted to pay 10% deposit. I was then advised by my mortgage adviser that as I am working part time, if i go for 15% deposit it would not be a problem.
    In order to gather my deposit, my mum has given me 3000 as gift ,3000 from my cousin as a gift and i had to borrow 1700 from my friend. When I went to the solicitors and she went through the application , there was a question regarding the deposit that have to borrowed it? I have explained that my mom and my cousins have giften me some money and i borrowed 1700 from one of my closed friend.She then advised me to get letters from all the parties who have donated you gift and lent you money and that they do not acquire any interest in the property. I have handed those letters to my solicitors.
    My solicitors has said that she has to sent all the letters to mortgage lender for them to aprove it.
    I am a bit worried that although the money has been transfered straight from their accounts into my accounts. I do not know why she needs an approval?
    2nd worry is that whether the mortgage lender can withdray the mortgage offer or not,

    i am having sleepless nights as i desperatly needs the house as i have one disabled son and expecting out second child.

    please can you guy tell me why all this?i know it is to do with money laundering but i work for the same bank who i have applied mortgage with
    • 80schild
    • By 80schild 11th Feb 11, 9:52 AM
    • 239 Posts
    • 46 Thanks
    80schild
    We had 40,000 gifted to us from mine and my husband's parents. part of this was to repay neagtive equity on our current house and the rest for the deposit on the new place!
    For our solicitors acting for our purchase we had to provide a bank statement showing the money being transferred from my parents account to ours and letter saying they had gifted the money and had no interest in the property.
    For the solicitor acting for our sale we only had to supply a letter saying the money had come from parents-no bank statements.
    Everything was fine-like you I was really worried that it would affect our mortgage offer, but it didn't!
    • Soot2006
    • By Soot2006 11th Feb 11, 9:57 PM
    • 1,159 Posts
    • 1,153 Thanks
    Soot2006
    I also had a substantial gifted deposit - arrived 30 days before we made mortgage application, from France by bank transfer.
    I provided a bank statement showing its arrival and said it was early inheritance and it was never questioned, nor a letter from my mother required. I too had many sleepless nights about being accused of being a drugs dealer or something. It's hard to stay rational when you're worrying about everything going wrong with your first house purchase!
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