Mortgage Application Panic!!

dpr666

Hi All,

I am a first time buyer so obviously have never applied for a mortgage before. The process has been fairly simple for me because a financial advice company has been looking after it for me. Although it has been dragging on for about 6 weeks there have been no snags and it looked like I would be getting final approval this week.

That was until yesterday! The application is at the very final stage (mandate checks???) when they queried a large deposit of £10k paid in to my current account. Basically I will inherit £10k in a few months from my late grandfather. Because I had already found the flat I was looking for a very very close family friend was kind enough to loan me the £10k to put towards my deposit/legal fees until my inheritance comes through.

I had to create a letter signed my the person stating that it was a non-refundable gift, and that they have no interest in the property upon completion. Fine, no problem.

My financial advisor seems to think that the fact they are unrelated will cause an issue with the application!!! I am extremely worried now that an act of kindness from a close family friend could mean me not being granted a mortgage!

Has anyone had any experience of this with their applications? Is it something that will just cause a delay or could it have more severe effects?

Many thanks in advance!

Dave_Ham

Totally depends on who the lender is...?

betmunch

Its not a non-refundable gift though is it? Your paying it back when you get the inheritance.

I would hope that a letter from the executor of your late Grandads Will explaining that you will inherit £10,000 and a bit of common sense will get you through this.

Sadly common sense is majorly lacking in mortgage lending these days.

Keep us posted

dpr666

betmunch wrote: »

Its not a non-refundable gift though is it? Your paying it back when you get the inheritance.

I would hope that a letter from the executor of your late Grandads Will explaining that you will inherit £10,000 and a bit of common sense will get you through this.

Sadly common sense is majorly lacking in mortgage lending these days.

Keep us posted

Hi, thanks for the reply! I understand what you mean that it's non refundable because I'm going to eventually pay her back, but Nationwide doesn't really need to know that

I just found this website:

http://www.nationwide-intermediary.co.uk/lendingcriteria/schemes/equity_share_schemes

It clearly says that gifts can come from family/friends!!

I really don't know why they're questioning it. I have my financial advisor on the phone to them now, so hopefully I should have some news before tonight. I don't want to be panicking all through the weekend!

dpr666

Dave_Ham wrote: »

Totally depends on who the lender is...?

Sorry, the mortgage lender in Nationwide.

Moomum

We had the same thing, mil gave us the £30 k for stamp duty, we gave them a letter and they were fine. This was nationwide too.

dpr666

natmid wrote: »

We had the same thing, mil gave us the £30 k for stamp duty, we gave them a letter and they were fine. This was nationwide too.

Good to know! Was the person just a friend in your situation too?

betmunch

dpr666 wrote: »

Hi, thanks for the reply! I understand what you mean that it's non refundable because I'm going to eventually pay her back, but Nationwide doesn't really need to know that

Congrats on your first mortgage fraud (is there a sarcasm smiley?)

They do need to know that though as they would be concerned that you would be taken a loan to pay it back after the mortgage is granted.

There is another thread already today where the poster is taking a loan to make up the deposit and doesnt want to tell the lender as it is something that will adversely affect his application.

In your situation, as I mentioned before, common sense should prevail. While it is a loan, it will be paid back by funds that will not affect your ability to pay the mortgage.

Dave_Ham

Think you got the answer, but I think you will be fine.

Good luck

dpr666

betmunch wrote: »

Congrats on your first mortgage fraud (is there a sarcasm smiley?)

Again I can see what you mean. However I have been completely open with them and told them the full situation. They are aware that the money is basically an advance on my grandfather's inheritance, and it was they themselves that advised me to class it as a gift and create the letter.

With regards to the other thread, I wouldn't be stupid enough to get a loan to get another loan! The only reason I was able to get a mortgage was because I was lucky enough to inherit this money.

betmunch

You applied direct and the guy in the branch told you to say it was a gift?

reference to the other thread was just incase people couldnt see the difference.