Your Views Needed!! What is Gifting Deposit

fonzyg50

Good evening everybody

we have been ready to exchange for 2 months now as the bottom chain is really slow. There solicitors have now said to us that the buyer is getting the deposit from someone else,so they need to tell the lender that this is a ''gifting'' deposit. the solicitor have already contacted the lender about the gifting deposit.

we haven't got a clue what all this is, and now we are worried that we are all at risk of the chain collapsing. could the lender refuse this.

whats your views or if anyone experienced/had a similar story.

thanks everyone :j

Fire_Fox

Do you mean gifted deposit? The buyer did not save up the deposit they are being given it, it is a gift from a relative or perhaps the seller if a new build. Yes lenders can refuse it, they want to establish that there are no strings attached. They also like to see that an FTB can prove they are capable of saving money.

fonzyg50

Fire_Fox wrote: »

Do you mean gifted deposit? The buyer did not save up the deposit they are being given it, it is a gift from a relative or perhaps the seller if a new build. Yes lenders can refuse it, they want to establish that there are no strings attached. They also like to see that an FTB can prove they are capable of saving money.

hello, yes sorry its gifted, I've just read my email from my solicitors and it says that someone is giving him some money towards the purchase

julieb1987

I'm a teeny bit worried now. My mum is giving us a large chunk of our deposit and we haven't told our lenders....then again they never asked! We weren't asked to disclose how we got the deposit (just how much we had) so I'm guessing it can't be a deal breaker? We've had the valuation and offer through (solicitors have also had the offer) and there's nothing about the deposit on there. Are we OK?

Fire_Fox

julieb1987 wrote: »

I'm a teeny bit worried now. My mum is giving us a large chunk of our deposit and we haven't told our lenders....then again they never asked! We weren't asked to disclose how we got the deposit (just how much we had) so I'm guessing it can't be a deal breaker? We've had the valuation and offer through (solicitors have also had the offer) and there's nothing about the deposit on there. Are we OK?

Speak to your conveyancer.

fonzyg50

julieb1987 wrote: »

I'm a teeny bit worried now. My mum is giving us a large chunk of our deposit and we haven't told our lenders....then again they never asked! We weren't asked to disclose how we got the deposit (just how much we had) so I'm guessing it can't be a deal breaker? We've had the valuation and offer through (solicitors have also had the offer) and there's nothing about the deposit on there. Are we OK?

thats got me thinking aswell, we have been given £6000 for the fees etc which is already in my bank, so if i were you get the money into your account asap.

julieb1987

Well I have the money now, just waiting for exchange date to transfer to my solicitor. I have looked at my mortgage offer and there is nothing in there about where the deposit should come from. I'm just not going to say anything, unless asked. I don't see the problem. We can afford the repayments (less than our current rent!) and they wouldn't be getting their interest money if it wasn't for my mum's "gift".

kingstreet

The lender appoints the purchaser's solicitor to act for it. Checking the source of the deposit is something the lender delegates to the solicitor, so questions about the deposit and its source may come later on in the process when the solicitor is almost preparing the report on title to request the funds.

bigmomma051204

A gift towards the property purchase only really has bearing on lending etc IF that gift is expected to be repayed ie NOT actually a "gift" but a LOAN.


Ie, if someones parents were to lend them £10,000 BUT expected the loan to them to be repayed then obviously it would have to be taken into account when mortgage lender is working out how much your monthly outgoings are...that would then have an effect on how much they would be willing to lend to you in total. Also it MAY have bearing on the mortgage as a whole due to the person "gifting or loaning" the money then having an "interest" in the property, thus possibly causing problems with regards to repossessions....

In summary - if it is a GIFT (no strings attached) then thats probaby fine - the people who are giving the gift will need to write a letter to that effect though and pass it to the conveyancer

AlexMac

Interesting thread. We once loaned the kids a chunk of cash towards a deposit so they'd get a lower % rate on the mortgage (as lower loan-to-value). No formailities, nothing in writing but lots of mutual trust; hey repaid us- some along the way and the balance on eventual sale. Never even thought to mention it to the lender. Family business; don't lie, but don't tell people more than is good for them!

midge61

Hi
I am selling a property in my name and my husband is buying our new home with a small mortgage in his name.....he has good credit rating I don't. I am gifting him the deposit from the sale.
The mortgage company will either accept a letter from the solicitor signed by me or we have to take out an indemnity insurance .....this is what the solicitor has said.
Hope this helps