Nationwide gifted deposit letter...HELP PLEASE..

nuuki9

I wasn't sure whether to start a new thread, but thought I'd start on this one...

We've had a mortgage offer from Nationwide. Our solicitor has now flagged that as some of the money is a gift, we'll need to go through some additional steps, as follows:

- ID and bankrupsy searches on the donor
- Drafting additional legal documentation for us and the donor
- Take out Insolvency Indemnity Insurance

They've raised to us the risks such as other family members disputing etc. They're referencing this all back to *specific* CML requirements for Nationwide. They include this nugget:
"Some buyers are innocently led to believe (often by someone less senior on the phone desk at their lender helpdesk) that a simple letter from the Donor and buyer will be sufficient to pass their head offices’ gift procedure. Regrettably this is wrong as your Lender’s Head Office will want full protection before they will release your full mortgage money."

Now we've already provided letters as part of the application process, which I believe cover off the points in this thread e.g. that the gift does not infer any interest in the property - these letters followed the advice from our broker, and were accepted by Nationwide as part of the offer process. We have a large deposit so understandably Nationwide applied a lot of scrutiny as to the source of funds, which we got through fine (albeit with a lot of paperwork involved). As such I thought we were done on that front...

If these really are additional, specific requirements that Nationwide have then I guess we'll have to jump through the hoops, but they seem *way* over and above what I'd have expected, and will add a lot of time and additional expense at the point where we really want to Exchange.

From a risk standpoint we're entirely comfortable - the money was a gift from my OH's mother, who is now retired. As her only living relative, we're comfortable that no-one is going to dispute the money, or that she's going to go suddenly bankrupt.
So what I need to know is, does this sound like something Nationwide will actually need? I don't object to our solicitor laying out possible risks and options and I realise they represent the lender as much as us, but in this case its sounding like we must complete these checks and take out this insurance, which doesn't line up with what I've researched or understood. I have asked my broker to provide some input and I've asked the solicitor to provide the specific CML requirements, as I've not found them in the CML handbook part 2.

I thought I'd ask here too though. Any advice would be very gratefully received...

kingstreet

https://forums.moneysavingexpert.com/discussion/4935232

Similar case here.

2tort

shamaila wrote: »

Can anyone please help me. We are in the process of buying a property and are in the last stages of completing. Our mortgage lender Nationwide are asking for gifted deposit letters from everyone who has gifted us money towards the purchase of our property. Our solicitor has drafted this letter out which i have included below, can someone please advise me if this will be acceptable by nationwide. Please share your experiences. Thanks.

Borrowers: xxxxxx & xxxxxx
Account no: xxxxxxx

Donor’s Names : xxxxxxx
Donor’s Address: xxxxxxxxx
Amount of the Gift: £****
Relationship to Borrower: !Brother

! wish to make the above gift to the borrower to assist in the purchase of the property.
I declare this is a non-returnable and unconditional gift and there will be no express or implied trust arrangements which might give us any rights in the property or any right to reside in it as against Nationwide Building Society.
I understand that if the money is not intended as a true gift that there are other methods by which we can protect our financial interests and we understand the importance of seeking independent legal advice and have had the opportunity to do so

Signed
Donor……………………........................................
Dated.....................................................................
!

Nationwide provided us with a gifted deposit template form that you just get filled out, ask them for this

amnblog

Two and a half years ago nationwide were not using the gift deposit pro forma.

kingstreet

Yep. The template was only launched in January 2014.

http://www.nationwide-intermediary.co.uk/includes/pdf/P2505_03_14.pdf

kingstreet

benjam wrote: »

I have a friend in a similar situation, does it matter if the person making the gift has CCJ's?

The solicitor may carry out a solvency check on the donor. A single CCJ might not be an issue but if there's any chance the donor might make themself bankrupt soon after making this gift, it will be an issue.

Thrugelmir

benjam wrote: »

I have a friend in a similar situation, does it matter if the person making the gift has CCJ's?

The beneficiary should be aware that monies can be recovered by creditors under the Insolvency Act 1985. Gifting money does not mean that the money is "safe" in certain circumstances. The property can be forcibly sold.

LukeZak

I am getting a Gift letter but the donor is asking how would this effect his future mortgage application? I have no idea what would be the answer.:mad:

Can anyone help?

GMS

LukeZak wrote: »

I am getting a Gift letter but the donor is asking how would this effect his future mortgage application? I have no idea what would be the answer.:mad:

Can anyone help?

He would have less of a deposit!

alexwhisper

We have just used 2 gifted deposit letters from parents to buy. Dont worry! There's no need to pay a solicitor to do it any numpty can. My mum wrote dear...enter lender name


I have gifted £x amount of money to my daughter enter name and her husband...enter name for the purpose of putting a deposit on a house of their choice. I do not require this to be repaid


signed


its that simple! All banks inc nationwide accepted it before we eventually chose which lender to us. We were getting pre approved first in principle before property searching