How to prove source of deposit

smallpurplepill

Hello all

Hopefully a straightforward answer to this to help stop worrying! Any suggestions/advice appreciated.

Have decided to 'think about' buying somewhere as a FTB and concerned about questions from solicitor/lender (?) about source of funds for the deposit. (This is the latest in a series of worries unfortunately!)

All is above board and is a combination of savings over the years and sale of shares bought over 5 years ago and sold around a year ago. (I can't prove the savings over the years though as it's not that I have "come into" money as such, but rather have 'gone without' on things like food, holidays and so on, so the savings have come from not spending salary and so on rather than actively coming in as additional money, if that makes sense - so I have bank statements showing a certain amount and for example outgoings £1000 less (or whatever) than income each month so a gradual gain in total net amount.)

Say I have a bank balance of 'X' of which 70% is from savings and 30% from shares (hypothetical % as I am not sure of the actual %). Obviously I don't want to spend the whole 'X' on deposit as I want to keep some in savings, so smaller sum 'Y' is actually the deposit- so is the source of the funds for 'Y' also in proportion 70% savings / 30% shares in which case I can't prove the actual amounts as they won't match up on paper as for example if the original amount of the shares was £10,000 and the 30% "proportion" of this would be £3000 but there won't be a transaction for £3k as the sale was for £10k!

How much detail do they go into with questions like this?

If they decide there is something 'dodgy' about it (I promise there isn't!) and I can't prove it well enough, will they just refuse to go any further on the mortgage etc or is there further action they would take like anti money laundering and Police etc?

"Happier" to carry on renting and not take the risk on police involvement etc especially as I have done nothing wrong if there's a chance this will happen, I'm not naturally risk averse but unfortunately policy often has unintended effects and can't take the risk on that happening for obvious reasons!

Thanks!

seraphin_2

As far as i know you do have to prove where the deposit has come from, because of money laundering and i suppose people trying to dodge the ftb stamp duty.

As long as you can prove you had the shares and also your bank statments back up the money you have saved it shouldent be a problem i wouldent have though.

With regards to money used for a deposit its up to you if you want to keep money back for other things, what the banks are bothered about is if you can afford to pay it back


Hope that helps

sarah

seraphin_2

not take the risk on police involvement ?

why would that even cross your mind if youve done nothing wrong, if you have to think like that then im assuming something dosent add up with where the money came from, if thats the case you are heading for trouble anyway.

If im mistaken i appologise

Thrugelmir

You should annual statements showing the interest earnt on your savings, this should also show your balance. Over time this will increase.

When you sold shares you were issued with a contract note.

So if all is above board why the questions?

Xbigman

This is a total non issue as far as a mortgage is concerned. If the money is in a bank account then the mortgage lender will not blink. 'Where is your deposit coming from?' answer ' savings' end of conversation.

Now if you had 20k in cash in a suitcase that would be different.
Regards



X

Pammy

Do you actually have to prove it? I was only asked to write and sign where it came from.

Castleman

smallpurplepill wrote: »

"Happier" to carry on renting and not take the risk on police involvement etc [...] and can't take the risk on that happening for obvious reasons!

What are the obvious reasons? Confused!

Pincher

You are more likely to be audited for tax reasons, for which you are supposed to keep records for several years back, which should be more than sufficient for the mortgage. If your records are not complete, worry about the tax man, not the mortgage.

tigtag02

You are either 'up to something' or the most neurotic person on earth!

tryfive

seraphin wrote: »

not take the risk on police involvement ?

why would that even cross your mind if youve done nothing wrong,

The Birminham Six, the Guidford Four, more recently Jean Menezes, etc, etc.

"Nothing to hide, nothing to fear", huh? Perhaps you'd like to suggest the new government disband the courts system; after all, the police only arrest guilty people, so why bother with a trial, right? Riiiiiiiiiiiiiiiiiiiight...

LillythePink

What are you so obsessed about trying to prove where your money came from?

All you have to do is show a bank statement in your name which is (obviously) up to date (when you have your app).

Yes, they may ask source of funds - but you just have to say savings and share sale (IF you need to)

If you're that worried about trying to tie it all up to past statements etc, then to me it does show that you have something to hide or you're just too anal about these things (no offence)