Mortgage deposit proof

nit_mis

Hi,

I am a first time buyer and applied for mortgage with my partner. For our mortgage application with 15% deposit (£33,750) for buying a house with offer of 225K,
we have submitted bank details.
- £14K was already in our savings account.
- £11K from the bank accounts of our 2 friends who actually invested with us together and since we need this money, so asked them this amount.
- £10K we held cash and we deposited that money.

My only worry is how do the underwriter see last two amounts of £11k and £10K and this should not become a reason for mortgage application rejection.

We both are employed since last 5 years and earn descent salaries of around (£2500 net each) and provided all proofs with salary slips and P60s etc.

Has anyone faced this situation before?

Thrugelmir

nit_mis wrote: »

- £11K from the bank accounts of our 2 friends who actually invested with us together and since we need this money, so asked them this amount.
- £10K we held cash and we deposited that money.

Certainly raises more questions than answers.

If I was an underwriter would I feel uncomfortable and that there is far more to this. Simply put yes.

nit_mis

Thanks ThruGelMir for your prompt reply but which bit in your opinion is most uncomfortable?
- Is the money from friend's paid into the bank a/c?
- Or Cash deposit?

The reason for asking is because I can ask my friends for proof of the money transferred to my a/c as they are high earners
But not very sure about how to prove cash as some of the money is from overseas investments.

arby

what do you mean 'cash'? you just had £10,000 cash under your mattress? sounds a bit odd. surely it was in some bank account somewhere? in your name?

Thrugelmir

nit_mis wrote: »

Thanks ThruGelMir for your prompt reply but which bit in your opinion is most uncomfortable?
- Is the money from friend's paid into the bank a/c?
- Or Cash deposit?

The reason for asking is because I can ask my friends for proof of the money transferred to my a/c as they are high earners
But not very sure about how to prove cash as some of the money is from overseas investments.

Without paperwork how would you account to the HMRC for your overseas investments proceeds ?

Friends don't normally lend £11k without some form of agreement. Whatever there personal circumstances are, has no bearing on your mortgage application.

Current money laundering regulations are very clear. Dealing in "cash" is obviously very suspicous in this technological age. The bank has a duty to be confident in the source of the money.

nit_mis

Just to let everyone know that the mortgage is finally approved. My mortgage broker mentioned clearly that the money earned is from the disposable income which they agreed.
From our salary slips its quite evident that the deposit money is quite easy to accumulate.
Thanks to all for their replies.
Just want to mention one thing that it is really a FALSE perception that "Friends don't normally lend £11k without some form of agreement".
Not all people are same in the world. My friends really helped with in the hour of need (with no agreement) and I feel proud to have friends like these.

betmunch

To be fair, its not a FALSE perception though is it.

To have said "friends dont lend £11K" would have been false. But "friends dont NORMALLY lend £11K" is exactly right.

Just in a pedantic mood, please dont take offence!

GMS

Solicitor is still required to be satisfied with the source of deposit for completion to take place.

May need to provide details there.

CloudCuckooLand

Hope the lender doesn't get last minute wobbles, when they think to ask if the friends have any interest in the property...

g_attrill

As mentioned, if the friends have loaned you the money (even if it wasn't on paper) then you probably should have declared that to the lender.

badm88n

nit_mis wrote: »

Just to let everyone know that the mortgage is finally approved.

Out of interest who is the lender? Offer £225,000 deposit £33,750 mortgage required £191,250 (85% loan to value).

It would be good to know who is lending in this tight market.

Cheers