'Gifting' Money

Yorkie1

property.advert wrote: »

If I were you I'd just stick the cash in the bank and if asked where it came from I would say that I had sold my car / chess board / dog or whatever.

The game has changed and though you may technically be fibbing, the end result is what you need to achieve. And no, if you don't tell and they don't tell, there isn't some big brother going to tell either. You just have to think it through and make sure you know how to explain it all away.

The game has not changed so as to make fraud any the less serious. Lying about the source of a deposit is just as much mortgage fraud as it ever was.

sockpuppet

You could just 'stick the money in your account' but the lender/solicitor will still ask where the large amount deposited has come from.

If it is large amount, I dont think they would believe that you have just sold some random item. They will generally ask to see the 'build-up' of funds if you have so-say saved it up.

Just ask the lender a general question as regards you friend, if they are some member of family you may well be fine. As long as they are happy to sign a letter stating they are gifting it there shouldnt be any problems. If between you later you decide to pay it back there is no reason they would need to know about this.

duckandcover

I was a FTB back in November and I never had to say where I got the deposit money from...? Which is good because it was a loan (informal) from my parents which I'm now paying back.

Do some lenders ask the source of the deposit money? I ask that because some of my friends are now starting to think about buying places of their own and I wouldn't want them to get in trouble.

Yorkie1

There is a question on the mortgage application form - amount of deposit, and source of deposit. I assumed all lenders wanted to know this ...

kingstreet

Not all. Some ask, some don't.

Some leave it to the solicitor to check by putting it in the mortgage offer conditions.

Abbey/Santander allows you to borrow from a relative and is happy for the relative to take a second charge. The only proviso is the loan has to be repaid from the sale proceeds. Monthly payments aren't allowed.

http://forums.moneysavingexpert.com/showpost.php?p=51226703&postcount=15

sonastin

Without actually having any experience of banks and their odd thought processes, I would actually be surprised to find that they object to gifts coming from anyone other than family members. Providing the person giving the gift is entirely independent of the vendor (so that there is no way this could be a vendor-gifted deposit artificially inflating the purchase price of the house) and there is no "loan" or priorty charge/share in the ownership of the property, I don't see how it would make any difference to the lender.

But as I said, banks sometimes use a different logic to the rest of us. If it must be a closer family member giving the gift, do you have a relative who could launder the money through to you? i.e. friend gives your parents a gift and your parents give you that money to purchase the house? Less fraudulent than claiming you sold something to acquire the money.

Thrugelmir

sonastin wrote: »

I don't see how it would make any difference to the lender.

Unrelated parties do not normally gift money without conditions attached. In addition there are circumstances in which the money could be reclaimed therefore requiring repayment.