Gifted Deposit and Solicitors

Gazumped_2

How is a contract drawn up with a gifted deposit?

Can anyone with some experience help please?

I have just received a final contract with a statement of account.

House purchased for £120k with 5% gifted deposit from vendor.

Got a mortgage offer for £102k (10% from me and 5% from vendor) with house valued at £120k.

Now the contract is currently being drawn up with the purchase price of £120k and it mentions a 5% gifted deposit but does not really state where it comes from.

I have received a statement today as follows.

Purchase Price £120k
Solicitors Fees £1k

Mortgage £102k
Deposit due on exchange of contract £12k

Amount due on completion £7k

No mention of the 5% coming from the vendor.

Now I will speak to the solicitors in the morning. But if I sign/agree to this, have I not just signed to say I will pay the full 15% deposit?

I know this is very unlikely but what is stopping the solicitors giving the vendor £120k or keeping the 5% gifted?

And before anyone tells me the solicitors are working on behalf of me, The solicitors were recommended by financial advisor who was recommended by the estate agents. And yes I know this is far from ideal and I will not be doing it again, but I am quite far down the line now.

Thanks for you help.

DVardysShadow

Gazumped wrote: »

I have received a statement today as follows.

Purchase Price £120k
Solicitors Fees £1k

Mortgage £102k
Deposit due on exchange of contract £12k

Amount due on completion £7k

No mention of the 5% coming from the vendor.

Now I will speak to the solicitors in the morning. But if I sign/agree to this, have I not just signed to say I will pay the full 15% deposit?

Fairly obviously the 7k is the gifted deposit plus your fees. But it really does need to be made explicit somewhere. Don't sign until you get clarification in writing.

Gazumped_2

Yes sorry I should have been clearer, I am aware the £7k is the 5% + the fees and I have just made up the figures to illustrate.

It says the £7k is payable by us though.....

DVardysShadow

Gazumped wrote: »

It says the £7k is payable by us though.....

Then the seller has to find a way of giving you £6k. You need to pursue this with the seller and your solicitor.

Your problem may be that the house has to be described as worth £120k, else your mortgage comes unravelled.

This is the problem with gifted deposit. There really is no point, lenders don't want to give credit for it and it looks to me like the solicitor and the builder are acting to deceive your lender, unless you have told them about the gifted deposit nonsense. I call it nonsense, because it really is a long way around to buy a house at £114k

Gazumped_2

Lender is aware, and lender is one of the few that accepts a gifted deposit.

Richard_Webster

The likelihood is either the solicitor wasn't told about the gifted deposit or he simply made an error and asked you for the higher figure by mistake because he had forgotten about the gifted deposit.

Talk to your solicitor - he will probably say it is a mistake.

Gazumped_2

Yes they have confirmed it is an error on the statement and submitted a new statement via email.

How will the gifted deposit be worded on the contract? I am asking because, as it should, the contract lists a purchase price of £120k and the deposit section is currently left blank with the words 5% Gifted deposit penciled it.

Should this section read 10% Deposit from Buyer and 5% Gifted Deposit from Vendor?

I am just concerned I will be signing a contract which will make me liable to pay the whole 15%.

Thanks for your help.