Mortgage Deposit

becca2_2

Currently in the process of getting my mortgage application sorted. Myself and my partner are buying the house, but the mortgage is going to be purely in my name and based on my income etc.
I've just been ased for proof of deposit from the bank. Now the deposit is being funded predominantly by the money from the sale of my partners flat and therefore the funds are sitting in her bank account.
I told them that and they said they would have to send me a form out to sign to say the deposit will be a gift. But I believe if they do that she will also have to sign something saying she is not interested in the money/property which is not correct as in theory we are buying the flat together!!
Is there anyway around this without having the mortgage in both our names? I could just transfer the funds into my account but I would still have to say where i got it from.
Any ideas??
Thanks.

Mrs_Bumble

If the mortgage is solely in your name then the deeds will be in your name.

So as far as the lender is concerned the deposit monies will need to be a gift or else they will be a loan which will mean repayments etc.

If the mortgage is going to be in your sole name has your partner sort legal advice to protect her interest?

Is their any reason she can't be on the mortgage application?

puppy8910club

You could ask other half to give you the money as a gift and get a solictor to draw up a living agreement to protect her interests i.e if you split.

For example she could be entitled to the belogins of the house or a share in the house when sold etc.

Likewise even if a low income could she not be on joint mortgage.

becca2_2

She's has credit problems in the past, although she has has a mortgage and had no problems with payments. Given the problems and the current financial setting we thought it might be best to keep this mortgage in my name.

Could she be added on to the mortgage but without her income being taken into account? And if so will she be subject to credit checks etc?

I think the best thing would be her gifting the money and then we can have our solicitors draw up a separate legal agreement.

One last question if the deposit is classed as a gift is there a limit to how much can be gifted? I've seen things mentioned in previous posts about a gift only being allowed to be a certain % of the deposit.

Mrs_Bumble

Do you know exactly what is showing on her credit file?

If she was added to the mortgage whether or not her income was taken into account she would be credit checked.

Definitely needs to be a legal agreement drawn up, sorry to sound cynical!

In relation to the deposit the the lender is abiding by money laundering regulations and needs to know funds are there and where they are coming from, they will require her to confirm that it isn't a loan, I can't see any other reason for them to ask.

I suspect you are thinking of vendor gifted and builder gifted deposits.

becca2_2

She looked at her file yesterday. There are 2 default notices from a couple of years ago. Overall score was not bad though- 840

think it will be easier just to go down the gift route...
Hopefully then if it all goes through well we can draw up some sort of legal agreement.
I'll have a chat to my solicitor and see what they suggest too...

GSXRCarlos

unless you wanted to make things really simple for yourself - transfer the money to your account and say it's your from savings?

I don't condone this activity and it certainly doesn't protect your partners financial interests

Mrs_Bumble

How big are the defaults?

Are they settled?

Who is the lender?