Gifted deposit questions

Coppice

Thrugelmir wrote: »

As one assumes they'll want a legal document to secure their loan. Which doesn't make it a gift without reservation.

Sorry should have clarified - legal agreement with my girlfriend to protect her interests. Her parents will gift the deposit to her, then her to me, if that makes sense. The advisor said this would needlessly add an extra layer, but this should make things easier in terms of the legal agreement. Hopefully that will be doable.

Appreciate everyone's time and input, it's great that you're helping us out.

holly_hobby

Coppice wrote: »

legal agreement with my girlfriend to protect her interests. Her parents will gift the deposit to her, then her to me, if that makes sense. The advisor said this would needlessly add an extra layer, but this should make things easier in terms of the legal agreement. Hopefully that will be doable.

But thats a gift with reservation (ie the legal doc reqd by GF and parents, denoting the terms under which its been made to you), further compounded by the beneficial ownership of the GF as a requirement/ in exchange of her contribution. If thats been explained to the adviser, I would guess that either the adviser doesn't understand the process, or hasn't really grasped whats going on.

If this all goes Pete Tong when it gets to app stage and the UWs requring a gift disclaimer (which obv your GF won't be able to truthfully sign), then adding her as jnt mortgagor will be your alternative option.

Hope this helps .... keep us posted

Holly x

Simon_gloster

I have a sneaky feeling the bank advisor doesn't truly understand the implications of the source of deposit. Its a legal issue more than lending money so the advisor should seek advice if uncertain.

This application will proceed for sure, however when the sols come to do their laundering checks via cml it may open a rancid can of worms.

Coppice

Just to update this thread. I applied for a HSBC lifetime tracker at 3.29%, unfortunately after the formal application they would only lend £115,000 (£135,000 AIP). The mortgage manager, regional mortgage manager and underwriter did not have an issue with the gifted deposit (well, perhaps they did through the lesser loan offering hehe).

I've since formally applied through L&C for Woolwich's lifetime tracker at 3.79% for £130,000. The valuation and full structural survey has been completed, currently waiting (and waiting) for the valuation surveyor to acknowledge a concrete screening test passed in 2007. Having some fun and games chasing up L&C to chase up Woolwich. Hopefully will hear back this week and get the formal mortgage offer!

holly_hobby

Coppice wrote: »

The mortgage manager, regional mortgage manager and underwriter did not have an issue with the gifted deposit (well, perhaps they did through the lesser loan offering hehe).

And you did explain that it was a gift with reservation from GF via her parents, and the fact that the official donor (GF) will be resident in exchange for the "gift" ?

If you did I am astounded (and doubtful TBH), as HSBC are as straight laced as they come.

Anyhoo, it didn't actually get to conveyencing stage re ML and gift disclaimer requirement - so the jury will have to remain out on that one.

Wish you well with your next appliction ...

Again I feel the issues remain re the source of the "gifted" deposit, the conditions it holds and the fact that the official donor will be resident in the property effectively in exchange for the deposit. Of course if GF signs the unconditional gift disclaimer, and you also conceal that she will be resident post completion, then it may proceed (notwithstanding the tenuous GF link).

Anyhoo, here to be proven wrong .... keep us posted .

Holly

Coppice

holly_hobby wrote: »

And you did explain that it was a gift with reservation from GF via her parents, and the fact that the official donor (GF) will be resident in exchange for the "gift" ?

Hi Holly, thanks for your feedback. While I didn't use those terms I was 100% transparent about the source of the deposit. Both managers said it was absolutely fine and more a matter of getting a deed of trust in place, something which HSBC would not get involved with. Like you say the application didn't progress so it may have cropped up further down the line.

Good news is that Woolwich have sent out the mortgage offer today :beer:

holly_hobby

Thats good, if they aware that the gift is not without reservation, and from a non-family member - than thats all to the good. (and someone we'll recommend to others in this situation - as usually lenders don't want to know if there is any beneficial interest or trust deed in place ).

Let us know when you've completed.

Holly x

Dave_Ham

Ok, Alarm bells ringing.

Just humour us and before you incur further cost check the Woolwich application form. Woolwich will enforce the application form is completed and returned before offer is made.

There will be a section on it that says source of deposit, typically this will say savings, equity or gift. In your case it should read gift.

In every application I have made to Woolwich where all or an element of is gifted, they have requested a gifted deposit letter from the donor. I already have this as knew they would ask and it says something along the lines of I know this person as a brother, daughter etc. and am gifting them the sum of £x for their property purchase.

I can confirm I hold no legal right or continued interest in the property and this is purely a gift.

I am hopeful this sounds familiar and therefore you have nothing to worry about. If none of this has been talked about I would suspect something else has been keyed which is likely to cause you issues further down the road.

Speak with your solicitor about this, as if your parents in law send the money directly to the solicitor account and this has not been done, they will tell Woolwich and your offer will be withdrawn.

If they send to you first to send to solicitors, many like to see bank statements in order to satisfy their regulations.

Not trying to worry you, just warn you of the potential pitfalls and this is something I have seen happen very recently to someone coming to be for advice once this has already happened with our friends from the Estate Agents..

All the best

holly_hobby

Absolutely Dave, to make it worse, its not even a Father in Law - its simply his girlfriends parents (with the return being the GF to be resident in the property) !!! So there is absolutely no family link, even if it could be periously argued of an extended family connection (which I wouldn't class it as TBH).

As it stands, the deposit is being fed via the GFs bank account (to conceal its source I think), and is on the proviso that the GF is resident in the property, and that if it all goes pete tong, he has to pay back the deposit to her parents/her.

I absolutely agree, I don't think Woolwich have a clue of the real basis or reservations of the gift, and that once it gets to conveyencing I think it will royally blow up.

Hope I'm wrong for his wallet's sake ..... !!!

Hols x

Dave_Ham

Thanks for the summary Holly, missed the original posts earlier in the year.

OP - please check what the Woolwich application reads, its on one of the early pages - page 2 or 3 from memory and you are looking for source of deposit.