Proof of Deposit - Mortgage

Kirstie70

Hi ,

I have a bit of a dilema, ive had an offer accepted on a house and submitted my mortgage application. After doing further reading ive discovered that the mortgage company dont accept gifted deposits from anyone residing in the propert but not named on the mortgage. My partner is going to be providing most the deposit but he is not going to be named as he has a terrible credit rating from the past.

We have thought about him passing the money to my mum, then saying this is a gifted deposit but then this could raise questions with money laundering regs. Can anyone suggest any solution to this? I have around 50% of my own deposit the rest is in his bank.

Thanks for your help

MagicCats

Wait and see if they ask for proof of deposit. If they don't then you are in the clear, if not you've identified a way of 'proving' your deposit as most lenders only require a letter from the family member stating the amount and that they will take no financial interest in the property.

Is it right doing this etc? That's for you to decide

Kirstie70

Thanks very much for your reply, I think almost definately we will be asked as we are FTB. I think the best approach would be to pass the monies to my mum and then she can gift these.

My only concern is will this ok when the solicitor comes to reviewing my mums bank statement as she doesnt have any savings of her own and will show a deposit from Mr XX the this money passed to myself

_Andy_

Fraud then? Great

MagicCats

To be honest there are people on the forum better placed to help than me. However I'll try and offer my thoughts from recent experiences.

Lenders are going to prefer a saved deposit that has come from you as a sole saver as it demonstrates good saving sense. If a gifted deposit comes into the mix the less the better for the reason just stated, but they'll be happy as long as the gift giver renounces any claim on the property.

Solicitors will want to see where the deposit has come from but they are unlikely to ask to see your Mum's account, in fact I believe legally she could tell them to shove off! All they will want to see is the transfer coming from your Mum to you. The money laundering side of things tend to be tighter above £20k so if your deposit is below this I can't see your solicitor being too fussed.

I am willing to be corrected!

As for the morals of your other half giving you money to put into the mortgage due to his bad debts etc; that is something you have to decide if you can live with. I say this purely as some forum members will possibly take issue with it.

Thrugelmir

Check with your mortgage lender whether they are happy with gifted deposits.

MagicCats

_Andy_ wrote: »

Fraud then? Great

It's a very grey area though, that's the problem.

Thrugelmir

MagicCats wrote: »

It's a very grey area though, that's the problem.

More so for the person advancing the money. As there's no legal recourse.

MagicCats

Thrugelmir wrote: »

More so for the person advancing the money. As there's no legal recourse.

What's your overall take on the OP's situation?

Kirstie70

Thanks very much for your replies. I wouldnt say this was fraud atall as all monies are legit and are backed by savings. The only thing fraudulent about this is that the lender doesnt want the gifted deposit to be from partner that is not named. Which i understand is for repossesion legalities.

So from my understanding the only person who is at risk here is my partner if the mortgage co. decided to reposess then he would have no grounds to stand. Obviously this wont be the case...

I totally agree with the above post regarding the demonstrating to the lender that you can save. Ive managed to save 10% independantly any my partner wants to contribute 10% so that the interest rate saves us over £100 a month. Ive managed to save this while renting which is double my would be mortgage repayment, so i think i have done not to bad with demonstrating to the lender. But i understand your post and respect that view.

Any ideas about the best "legal" way round this would be? My only other thought would be to ask my father who probably has savings in cash to front the gifter deposit for the time being and then my partner could give him it back...

Thanks

Thrugelmir

Kirstie70 wrote: »

So from my understanding the only person who is at risk here is my partner if the mortgage co. decided to reposess then he would have no grounds to stand.

Correct. The property will be in your name to do with as you wish as well.

Relationships do breakdown.