deposit money

Radsteral

HI , suposed to exchange next week and a friend of mine would help me with 9 thousand pounds for an indefinite period , paid from his account to mine..
would that be a problem if abbey asks?

also, when do i transfer the deposit money to abbey? the completion day or??

Yorkie1

My parents are helping me out with my mortgage purchase and although I can fund the deposit myself, unlike you, I imagine the principles will be the same. This is how I understand the situation but hopefully others will correct me if I'm wrong!

When I applied for my mortgage I had to answer questions about whether anyone else was assisting me with the finance. If you input that it is a loan, apparently that affects the amount they will lend. If it is a gift, it still should be declared (there's a declaration you sign and if they find out that you lied they can call in the loan or refuse to lend pre-completion, also it's potentially fraud).

The Solicitor also needs to confirm to the mortgage company that it is a gift and therefore my parents will need to do a letter confirming this.

So, it would seem that you have three options - 1. don't declare it and hope they don't find out. However, this is potentially fraud and could lead to you losing your house. 2. declare it as a gift and your friend writes a letter to the same effect. They wouldn't know afterwards if you made arrangements to return the gift but again it is not really the truth ... 3. declare it as a loan but this will potentially affect your mortgage offer.

I guess it's up to you to decide who you tell and how much, although I'm sure this forum can't condone illegality. NB If you tell your solicitor it's a loan, you can't then ask them to tell the lender it's a gift.

Edit: re the funds transfer, I've been told that the cleared funds need to be in the solicitor's bank account the day before initially exchange (10%) and then completion (balance). I haven't quite worked out the logistics of getting the money there yet - I think it's too much for a standard internet banking transfer, so it might be that the options are personal cheque, bank transfer, BACS transfer from your bank, CHAPS transfer. There are different timescales and costs associated.

benjo

Yorkie is right about transfering the deposit, 10% must be with your solicitor in good time for exchange of contracts and any further deposits well in time for completion, so if you are putting down 25% in total, you need to transfer 10% for exchange and 15% for completion.

I transfered my deposit by BACS to my solicitor - a bit of a pain since I hadnt realised I could only transfer 10k a day, so had to start transferring a week early to ensure all 60k arrived in good time.

happybroker

Radsteral wrote: »

HI , suposed to exchange next week and a friend of mine would help me with 9 thousand pounds for an indefinite period , paid from his account to mine..
would that be a problem if abbey asks?

also, when do i transfer the deposit money to abbey? the completion day or??

Abbey will have already asked re the source of deposit in your application form. Your solicitor will also ask and as they will also be acting for Abbey this could cause a problem if when Abbey asked you didn't tell them that a mate was helping you out with the money.

If your mate is lending you the money then it will be an issue.

Radsteral

thank you , i have already transfered the 10 percent , i m getting sick of these endless rules. when i lended him 15 k 4 years ago , it was a happy slappy and no one even bothered to ask . money paid back whenever he managed to.
I could ask him to pay me from his company to mine, but i have to pay the 20 percent tax on it .
Thought getting this money here would be easier than from abroad, but i think i would be better paying international transfer fees , and ask my brother to transfer it from there... i got proof that i have sent more than 30 k to his account from my hsbc account .
anyway , thanks and wish me luck