Using a gift towards a deposit

Almighty1001

I am a first time buyer and while applying for a mortgage I mentioned that the majority of the deposit is a gift from my parents and my partners parents.

My lender now needs us to provide a letter from both sets of parents confirming that the deposit is a gift and that the parents have no financial interest in the property etc which must be counter signed by a (our?? / the parents??) solicitors.

The question is, if the entire value of the deposit comes from my account, did i even need to declare it as a "gift" in the first place?

Obviously i dont want to mis-inform my lender, but it seems that declaring it as a gift is going to lead to more costs, with regards to both time and money!

Thanks for reading

_Andy_

Yes you do need to declare it's a gift. Not doing so would be fraud.

holly_hobby

Andy is of course correct .... and the administrative procecdures you have been asked to do are completely standard, and nothing to be concerned about.

Hope this helps

Holly

callmechar

Hmm interesting

If you were given money as various gifts eg xmas, weddings etc and saved it in cash would you have to declare every person that gave you the money?

MagicCats

callmechar wrote: »

Hmm interesting

If you were given money as various gifts eg xmas, weddings etc and saved it in cash would you have to declare every person that gave you the money?

No, but that's common sense. Nobody gifting you £20, £50 at Christmas etc is likely to lodge a financial claim against your property if you subsequently buy a house!

Conversely though with gifts of £20k and £50k for example, it would be much easier for the gift giver to argue that it was given to gain a financial interest in a property.

dalts30

As a warning we were gifted our deposit, it was a nightmare. Lots of the mortgage companies and advisors are not geared up to deal with gifted deposits. It took us 9 months and a lot of blood sweat and tears through a paper based application to sort it out. Good luck!

GMS

dalts30 wrote: »

As a warning we were gifted our deposit, it was a nightmare. Lots of the mortgage companies and advisors are not geared up to deal with gifted deposits. It took us 9 months and a lot of blood sweat and tears through a paper based application to sort it out. Good luck!

Which lender was this? Who gifted the deposit?

Family gifted deposits are straight forward to deal with and require very little extra in terms of processing.

Katpin

Definitely go through the process- they may ask to see proof of deposit, in which case you will then need to provide financial statements- they will.
Probably then ask where the money has come from.

sockpuppet

We deal with gifted deposits virtually every day and have no problems at all. The majority of lenders will accept them if they are from a close family member of the applicant/s (so in your case, both your parents would be fine).
All that we have ever needed is a letter - most lenders have a template one on their literature section, or they will tell you what they need the wording to be - and you will need two of these letters; one signed by your parents and one signed by your partners parents stipulating the amounts they are gifting (I have never known these letters needing to be signed by a solicitor?)

They are needed as you cannot just show a bank statement with, say £50k lump sum just appearing in it (given by the parents) as you will have to explain where the lump sum came from (money laundering regulations).
Most lenders when asking for proof of deposit will ask for a bank statement showing the funds and the showing the build-up of the funds, so if you have saved it up gradually this is obvious to be seen.

I cannot see why the gifted deposit should cause any problems or any additional costs. Obviously, make sure this particular lender does accept family gifted deposits ( I cant think of any who dont) and make sure the application is submitted correctly to account for this, so they dont start querying it further down the line.

viross5000

We had to provide letters from both sets of parents as we got money from each side. We just emailed them both a copy of a letter we'd prepared and they signed it and posted it back to us. It was very easy and certainly not the sort of hassle that would make it worth shouldn't be difficult. Almost all solicitors will let you walk in from the street with the letter, look at a driving licence, watch you sign, then sign themselves, for a small fee (I think it's about £5).

dalts30

It was from my partners parents.