Abbey won't accept deposit!

stanmoresaver

MortgageMamma wrote:

Andrew Smith has a good reputation on these forums, has over 12 years experience quote]

Absolutely !!!!

(Did you say 12 years MM )

SS

missile

Perhaps I am wrong I often am, but nevertheless I still feel that no mortgage company would go to such lengths and the Woolwich certainly did not. As far as I am aware Money Laundering Regs require no more than to confirm money comes from a UK bank account.

I guess most ordinary people will believe what you experts tell them without question, but that does not make it FACT.

Just to play devil's advocate:

I am sure I am not the only "ordinary" person to have a number of bank accounts and my current account has auto-feed from a.n.other account. Thus in my case when I write a large cheque (such as a mortgage deposit) there is a corresponding credit to my account on the same date. So when they examine my statement it would be just like CindyC, if her partner gifted the cash. Perhaps you could enlighten me, how could mortgage company verify where my money comes from?

helping each other! is exactly what I was trying to do and "pls be nice to all MoneySavers!"

HelpWhereIcan

IMO, the problem in this case is not neccessarily the fact that the OP's partner is providing the deposit, but the fact that it is accompanied by a Deed of Trust.

A lender will only accept a 'gifted deposit' if that gift is without reservation, not in return for a share of the equity and without obligation to repay at any stage. A Deed of Trust makes it clear that there is an obligation to repay and prevents the lender from having 'clear title' as the partner could in theory, claim a share of the property. Therefore, as they are not a party named on the mortgage, the lender will not allow their deposit.

andrew is 100% correct in saying that the lender always reserves the right to investigate the source of the deposit, and whether we like it or not, the lender can set whatever rules they like and are entitled to make whatever enquiries they wish. There are a number of lenders who will routinely ask for proof of the source of the deposit and will ask further questions if the money has been deposited into the account recently. Most of the time they will have an amount (maybe £10,000, maybe £40,000) below which they won't ask, but all will have a level above which they will ask - although this may not be publicised. Responsible lending, money laundering and arrears prevention all have their part to play.

If they ask and you can show that it has come from another account you control, fine; If it transpires that it has come from an account held by another person, the lender will want to satisfy themselves that it is a true gift and not a loan and that the gift is being given by a person they will accept - generally a close familly member.

From the sounds of it, it has always come from an account you hold, so in many ways you are looking at things from a different angle.

missile

HelpWhereIcan, Many thanks for giving me a clear and comprehensive explanation.

I believe Money Laundering regs, require checks where they have reasonable grounds to suspect the origin and on all ammount in excess of £5,000.

I am sure you are correct, it is that deed of covenant which is the concern to Abbey and nothing to do with Money Laundering Red herring.

Thus per my original suggestion, if CindyC's partner gifted her the money (with no ties) this is unlikely to be apparent to the mortgage provider and if it was, it ought to be acceptable to most, if not all? I am assuming that her partner is not a convicted drug dealer :rotfl:

Zoolook

missile wrote:

I do not think I am being over sensitive but I do object to you rubbishing my suggestion and I do not agree that money gifted to the morgage applicant would be grounds for rejection by mortgage lenders. There must be many thousands of parents who have done precisely that for their offspring.

I wonder if the "ordinary" people on this forum have had this Spanish Inquisition to prove where they got their deposit?

You've overlooked one small consideration in your squabble, which is that the person in this case supplying the deposit will be living at the property. Therefore the mortgage lender needs to know what the agreement is with the mortgage payer.

Where parents "give" their offpring money for deposits, it is not usually conditional and the parents won't usually be residing at the property.

missile

Excuse me I did not overlook that and it is not a squabble nor an arguement but a lively debate by good natured grown ups

Zoolook

missile wrote:

Excuse me I did not overlook that and it is not a squabble nor an arguement but a lively debate by good natured grown ups

You made a comparison between the "thousands of parents" who give their offspring a deposit and this particular case.

The point is, if someone is making a contribution to the investment AND living in the property, then the lender may (as in this case) either reject the deposit or request the person is somehow connected to the mortgage.

All in good nature of course...

Claudie

Not long ago we were about to purchase our first property; the deposit was coming from my OH's final payment from Her Majesty (he was leaving the Forces and we were using his gratutity).

We lined up a mortgage promise from the Halifax (our bank at the time, we were with them over 10 years!)and set out to find our home. Found the house, had our offer accepted, went to the Halifax and were told they changed their mind as they could not see evidence of our deposit in our account. It is common practice for the Forces to give you a letter of intent (they will only pay the money to your solicitor upon completion I believe it was) but the Halifax decided not to accept it, despite the fact we were open about everything from Day 1 and we were both employed with perfect credit ratings.

Thankfully we found another lender (via a broker which I wish we had to do from the beginning but who was to know?) and it all proceeded well after that but I learned that a mortgage promise means nought.

kaya

My Bank(RBS) wont accept more than 3K cash deposit without asking its origin, and we got a mortgage in january this year and put down 50k which was loaned from the mother in law(no paperwork), no questions were asked or money refused

missile

Zoolook wrote:

You made a comparison between the "thousands of parents" who give their offspring a deposit and this particular case.

The point is, if someone is making a contribution to the investment AND living in the property, then the lender may (as in this case) either reject the deposit or request the person is somehow connected to the mortgage.

All in good nature of course...

Yes I am aware and fully understand your comment. That is the essence of the previous discussion.