Declaring 'gift' for deposit - hidden costs??

goteamliz

Hi

I am buying a flat for £190,000 with a £150,000 mortgage. The deposit is made up of £20,000 from savings (£10k from me, £10k from my partner) and the other £20,000 will be a gift from our parents savings (again £10k from each).

My solicitor has said that I will need statutory declarations drawn up at a cost of £200 (£100 for each) to prove that the money is a gift and not a loan. Is this correct? Will signed letters from both parents not be enough?

Any help would be great!
Thanks

decemberchrist

What??? Why does solicitor care about how you pay for your property??
In my naive opinion, it should be the bank who will be worried if you have other loans. But in our case, when we told our bank (HSBC) we will get some gift from our parents (also almost half of our deposit), they seem to just accept this fine and asked no more questions.

MrsManda

We didn't bother telling them officially, may have mentioned it in the chat with the mortgage advisor when talking about the deposit - my OH's parents just transferred the money into our bank account. Once it's in our account it was ours to do what we wanted with just like any other money in our accounts.

kaych

same here with us, part of our deposit is made up of 'gifted' deposit from my partner's parents. the bank (HSBC) just asked whether they will have an interest in the property and we said no. so that was the end of that matter for us. maybe it depends on the bank as well?

LillythePink

We have had this - we have just bought a house with a wing - parents sold their place and gave us £200k towards the house.

we just had to give the Co-op a letter from my parents saying that they were giving the money - had to really as the house was £625k and we had £100k to put in - so we had to prove that we had the rest of the money as our salary multiples definately wouldn't have stretched that far!! lol

We have had a couple of agreements drawn up though to protect my parents in the event of the house having to be sold - they would get their money back out of the proceeds - but nowhere in anything was it to prove it was a gift and not a loan.

poppy_f1

my mum has gave me my deposit and my IFA said all i needed was a letter stating it was a gift - gave him this and hes passed it on to the lender (nationwide)

oh and my solicitor was aware where my deposit was coming from

goteamliz

Thanks everyone! I thought that might be the case, I think the solicitor might just be trying it on for a extra £200!

Will double check with my mortgage advisor to be on the safe side, but surely as long as I have the money that's all they should be worried about.

Thanks again

SimbaSimon

poppy_f1 wrote: »

my mum has gave me my deposit and my IFA said all i needed was a letter stating it was a gift - gave him this and hes passed it on to the lender (nationwide)

oh and my solicitor was aware where my deposit was coming from

I agree with the above. Ours was exactly the same, letter from parents to the solicitor.

getmore4less

LillythePink wrote: »

We have had this - we have just bought a house with a wing - parents sold their place and gave us £200k towards the house.

we just had to give the Co-op a letter from my parents saying that they were giving the money - had to really as the house was £625k and we had £100k to put in - so we had to prove that we had the rest of the money as our salary multiples definately wouldn't have stretched that far!! lol

We have had a couple of agreements drawn up though to protect my parents in the event of the house having to be sold - they would get their money back out of the proceeds - but nowhere in anything was it to prove it was a gift and not a loan.

That must mean it is a loan!

Without a charge how can they be sure to get there money back if others put charges on the property to its full value?

SmlSave

Hi,

Our parents lent us money to buy our house, we didn't tell the solicitors or the mortgage company as our parents didn't want any equity of the property and we're paying them back anyway.

phlash

It's a sad time isn't it.....we rely on our parents to gift us a deposit.

Really is an indication of the "Rent generation" vs the "Baby boomers".