Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • melissa1709
    • By melissa1709 6th Jul 17, 5:53 PM
    • 21Posts
    • 1Thanks
    melissa1709
    Gifted deposit Halifax mortgage
    • #1
    • 6th Jul 17, 5:53 PM
    Gifted deposit Halifax mortgage 6th Jul 17 at 5:53 PM
    Hi everyone

    My partner and I are buying a house and £6000 of our deposit is gifted.

    The money is coming from my grandad and a letter is needed from Halifax from the person gifting the deposit to say they are happy to do so and it is non repayable and they have no interest in the property.

    My grandad is very old school and doesn't want to get into the nitty gritty and write letters etc so we agreed for him to transfer the £6000 to my father and my father would write the letter and say the money is a gift from him.

    Our concern is my dad needs to say in the letter the source of the deposit, can he say it was a gift from his father? My dad works in the stock markets and all his money is tied up in shares or he would have given it to us himself, he was going to say the source of the money was selling shares but wasn't sure this would be OK if they then want to look into it further. Will it be an issue for him to say the money came from his dad or will my grandad have to write the letter himself with him as the gifter?

    Any advice is greatly appreciated

    Thanks
Page 1
    • Returntosender
    • By Returntosender 6th Jul 17, 6:19 PM
    • 29 Posts
    • 17 Thanks
    Returntosender
    • #2
    • 6th Jul 17, 6:19 PM
    • #2
    • 6th Jul 17, 6:19 PM
    Our lender-generated gifted deposit form only required a signature (we filled in the rest).... Surely he could manage a signature??
    • melissa1709
    • By melissa1709 6th Jul 17, 6:21 PM
    • 21 Posts
    • 1 Thanks
    melissa1709
    • #3
    • 6th Jul 17, 6:21 PM
    • #3
    • 6th Jul 17, 6:21 PM
    Hi thanks for your reply

    Yeah we did think if we could write the letter and ask him just to sign it he would be more than happy with this. Think he is just concerned if they then request further proof bank statements etc he wouldn't like that so much, like I say, he's very old school.

    Is it often they request further proof? Bank statements etc?
    • Ithaca
    • By Ithaca 6th Jul 17, 6:43 PM
    • 220 Posts
    • 238 Thanks
    Ithaca
    • #4
    • 6th Jul 17, 6:43 PM
    • #4
    • 6th Jul 17, 6:43 PM
    £6000 is not a lot of money* so your lender won't ask to see bank statements etc from your dad (or your granddad). As long as whoever ends up giving you the money is happy to put in writing that it's a gift with no strings (i.e. no claim on the property) you'll be fine. No one is going to go trawling through bank statements asking you to prove where £6000 came from.

    From the lender's point of view all they really care about is that if you default on your mortgage they can sell the house without someone else popping up claiming to have a financial interest in the property (e.g. "I paid 10% deposit therefore I own 10% of the house and its equity"). Hence the letter confirming the money is a gift.

    I've just found the letter my dad wrote when my parents gifted us some money for a deposit, it's literally two lines saying:

    "We confirm that we are providing a cash contribution to the above proposed property purchase as a gift and understand that we will receive no share in the property on completion".

    They also had to provide a notarised copy of their IDs (passports) for money laundering regulations, so it sounds like it might be easier for your dad to do this for you (assuming your granddad is likely to resist going to a local solicitor and getting his passport copied and notarised?). My parents' local solicitor did it for free in about 5 mins, but worse case it'll be £20 or so.

    * I know for many people £6000 would be an awful lot of money, but in terms of most modern property sales it's not significant.
    • SuboJvR
    • By SuboJvR 6th Jul 17, 6:44 PM
    • 445 Posts
    • 316 Thanks
    SuboJvR
    • #5
    • 6th Jul 17, 6:44 PM
    • #5
    • 6th Jul 17, 6:44 PM
    It's not the lender you need to worry about. In our case, our lender was happy with just their template letter.

    Your solicitor will be doing money laundering checks on the money and will want to see the source of it. Dropping into your dad's account a few weeks/months before it's needed may not satisfy them! It's more likely they will want bank statements from your grandfather. Not guaranteed, but this has been the advice offered to me, and indeed matches up with the documentation I have received from my solicitor.

    As described above my dad also needed to get a solicitor certified copy of his passport.

    I should add as well that my solicitor also wanted to see evidence of where our savings came from toward the house, not just for the deposit, but for other associated costs.
    Last edited by SuboJvR; 06-07-2017 at 6:47 PM.
    • SeduLOUs
    • By SeduLOUs 6th Jul 17, 6:57 PM
    • 2,093 Posts
    • 2,477 Thanks
    SeduLOUs
    • #6
    • 6th Jul 17, 6:57 PM
    • #6
    • 6th Jul 17, 6:57 PM
    I was approved for a Halifax mortgage with a gifted deposit of £40,000 from Dad (borrowing £80k). Nobody has asked for any other information from Dad other than the basic Halifax template letter and I was due to exchange next week (I actually pulled out of the purchase yesterday but that's another story altogether).
    • davidmcn
    • By davidmcn 6th Jul 17, 7:25 PM
    • 6,131 Posts
    • 5,879 Thanks
    davidmcn
    • #7
    • 6th Jul 17, 7:25 PM
    • #7
    • 6th Jul 17, 7:25 PM
    You can expect the solicitor to want ID and bank statements. Passing money through dad is only likely to complicate matters.
    • SuboJvR
    • By SuboJvR 6th Jul 17, 7:31 PM
    • 445 Posts
    • 316 Thanks
    SuboJvR
    • #8
    • 6th Jul 17, 7:31 PM
    • #8
    • 6th Jul 17, 7:31 PM
    I was approved for a Halifax mortgage with a gifted deposit of £40,000 from Dad (borrowing £80k). Nobody has asked for any other information from Dad other than the basic Halifax template letter and I was due to exchange next week (I actually pulled out of the purchase yesterday but that's another story altogether).
    Originally posted by SeduLOUs
    Did your solicitor not do any money laundering checks?
    • SeduLOUs
    • By SeduLOUs 6th Jul 17, 7:49 PM
    • 2,093 Posts
    • 2,477 Thanks
    SeduLOUs
    • #9
    • 6th Jul 17, 7:49 PM
    • #9
    • 6th Jul 17, 7:49 PM
    Did your solicitor not do any money laundering checks?
    Originally posted by SuboJvR
    Apparently not?!

    I'll be using someone different next time around anyway as it all seemed excessively slow and with very little communication for no particular reason.
    • melissa1709
    • By melissa1709 6th Jul 17, 8:28 PM
    • 21 Posts
    • 1 Thanks
    melissa1709
    Thank you so much everyone for your replies. I had read previous posts where people had said the lender wanted further proof of deposit, I suppose I didn't realise it would only be for higher amounts of gifted deposit they would do this for.

    My mortgage advisor has said the same thing, aslong as the letter states that they won't have any interest in the property and it is not repayable then they don't really care where the money comes from (obviously unless it was money laundering).

    I haven't quite got to that stage with my solicitors yet as we have just started the mortgage application but it's good to know they will need the person gifting the money to go in with their passport.

    Thank you very much everyone for your help
    • Lunchbox
    • By Lunchbox 6th Jul 17, 8:39 PM
    • 159 Posts
    • 145 Thanks
    Lunchbox
    Our solicitor did require bank statements and passport from the family member who gifted us a deposit that was only £7000, in addition to the letter of gift for the mortgage provider.
    • SuboJvR
    • By SuboJvR 6th Jul 17, 8:46 PM
    • 445 Posts
    • 316 Thanks
    SuboJvR
    Thank you so much everyone for your replies. I had read previous posts where people had said the lender wanted further proof of deposit, I suppose I didn't realise it would only be for higher amounts of gifted deposit they would do this for.

    My mortgage advisor has said the same thing, aslong as the letter states that they won't have any interest in the property and it is not repayable then they don't really care where the money comes from (obviously unless it was money laundering).

    I haven't quite got to that stage with my solicitors yet as we have just started the mortgage application but it's good to know they will need the person gifting the money to go in with their passport.

    Thank you very much everyone for your help
    Originally posted by melissa1709
    They don't need to go into the same solicitor, they can get it done locally as well and send you the copy then.

    But again, it's not necessarily the lender that will want further evidence of deposit and it doesn't necessarily matter how much the amount is. It's not their responsibility to make sure the money has come from a legitimate source.

    There's two parts to this:

    1. Lender and solicitor want to check you actually have the money.
    2. Solicitor is professionally obliged to ensure the money has come from a legitimate source, not from any dodgy dealings.

    Lender is therefore quite happy with the letter. Lender will expect solicitor to check the latter.

    I would prepare your grandfather for the likelihood of this, if solicitors are doing their job properly they will be checking the origins of the money.
    • Ithaca
    • By Ithaca 6th Jul 17, 8:50 PM
    • 220 Posts
    • 238 Thanks
    Ithaca
    It does seem a bit hit-and-miss. I've bought with gifted deposits twice (for much more than £6k-£7k) and never had to provide bank statements. Sounds like others have had different experiences, based on how their solicitors interpret the Money Laundering requirements.
    • SuboJvR
    • By SuboJvR 6th Jul 17, 8:55 PM
    • 445 Posts
    • 316 Thanks
    SuboJvR
    It does seem a bit hit-and-miss. I've bought with gifted deposits twice (for much more than £6k-£7k) and never had to provide bank statements. Sounds like others have had different experiences, based on how their solicitors interpret the Money Laundering requirements.
    Originally posted by Ithaca
    Indeed. My solicitor wanted to see the trail of how we were going to pay their fees (circa £1500) plus other costs of moving...!
    • melissa1709
    • By melissa1709 7th Jul 17, 6:33 AM
    • 21 Posts
    • 1 Thanks
    melissa1709
    Thanks again everyone for your responses.

    We went through solicitors forms last night and indeed you are all correct - 6 months of bank statements required.

    Like I mentioned my grandad is ridiculously old school and to be honest most of his money is probably in cash anyway. My dad is now thinking of selling some of his shares to give us the £6k, this isn't a problem to him his share portfolio is quite impressive! But if they require his bank statements, the money won't have shown in his bank for the last 6 months!? Anyone come across this? Do you think they would accept a share portfolio statement with proof of the funds?
    • xylophone
    • By xylophone 7th Jul 17, 8:24 AM
    • 23,470 Posts
    • 13,648 Thanks
    xylophone
    It is perfectly reasonable for a parent to decide that he'll sell some shares to realise cash so that he can give his offspring a cash gift.

    He'll have a contract note to prove the sale and the proceeds will appear in his bank account.

    He can then give you the money and will be able to prove the source.

    Your grandfather can give your father a present of the equivalent amount in due course.
    • SuboJvR
    • By SuboJvR 7th Jul 17, 9:01 AM
    • 445 Posts
    • 316 Thanks
    SuboJvR
    Selling the shares would make it easier/less intrusive - the evidence then becomes the evidence of the sale. And potentially one bank statement going in.

    I'm in a similar boat except it's a pension commutation that my dad is getting to help us. I have shown them the letter confirming this and the amount, which also says the date it will go in. They haven't asked me (yet) for his bank statement showing it going in and I'm not sure they will at this point.
    • davidmcn
    • By davidmcn 7th Jul 17, 9:03 AM
    • 6,131 Posts
    • 5,879 Thanks
    davidmcn
    Do you think they would accept a share portfolio statement with proof of the funds?
    Originally posted by melissa1709
    Yes, this would be fine. Grandad's cash is a no-no.
    • melissa1709
    • By melissa1709 9th Jul 17, 5:40 PM
    • 21 Posts
    • 1 Thanks
    melissa1709
    Thanks everyone.

    Spoke to our solicitor who said a copy of my dads share portfolio is fine, along with a copy of his bank statement showing the money going from his share account into his bank.

    Looks like we will be ok after all!
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,374Posts Today

7,225Users online

Martin's Twitter
  • Interesting, most people say they would champion a policy from a party they usually oppose. Yet is anyone brave eno? https://t.co/MWYGHunAqu

  • RT @MSE_Deals: The MSE deals team are in the office nice and early to bring you full analysis of all the #BlackFriday deals throughout the?

  • RT @MSE_Deals: #BlackFriday UPDATE... We've spotted some of Currys' prices are cheaper online than in its stores, eg, Sonos Play 1 £149 onl?

  • Follow Martin