Source of deposit - potential problem?

togarama

I had a spontaneous phonecall from my conveyancing solicitor today (first time they've called at their own initiative..) to let me know that the contract and other paperwork was now in the post for me to check.

She also mentioned that she would have to write to our mortgage lender to formally state that part of our deposit (5% of our 15% deposit) is from a loan (an interest free salary advance from established employer housing support scheme, to be paid back over 10 years direct from salary but deferred for 2 years, and not giving my employer any rights to the property in case of default).

This information was all given to my mortgage broker at the start of the mortgage application process. He told me that unless the salary advance was secured on the property it would not be an issue with Abbey as long as repayments remained within their affordability calculations. Looking at the mortgage paperwork, I can't see anything written on source of deposit so I don't know whether this has already been taken into account or not.

Does anyone know whether my solicitor is obliged to write such a letter? Or whether our mortgage broker's advice was correct on this? And if my solicitor does raise this with the mortgage lender, is it likely to delay the process further? (Or result in our offer being withdrawn?)

Thanks for your help.

benjo

I really dont know if this is a normal process between conveyancer and lender, I do know that your conveyancer should ensure that your deposit isnt some kind of money laundering scheme - but that doesnt seem the same thing at all. Im not aware that my solicitor did this - but then Im sure my solicitor did alot of things they didnt specifically inform me about.

Maybe this is standard practice, since essentially the money you are being lent is drawn down to your solicitor for a period of time - would be interested to find out.

Mrs_Bumble

I can't see an issue as long as there is not going to be any charge on the property and the repayments when they commence are not going to push the figures out of affordability calculations. I assume that the mortgage broker did run these through.

The conveyancer is legally obliged to check the source of the deposit and they should all do it as it is all part of money laundering etc and they do report back to the lender in the normal course of events so this is all normal.

Abbey may want written confirmation that the source of deposit from your employer is as you describe above and so speak with your broker and see if it is a good idea to request a letter now.