Deed of gift

wiley25

Hello,

I am currently purchasing a house.

£5000 of the deposit value is coming from my parents as an under the table no interest loan.

My Solicitor is asking for a Deed of Gift for the £5000, as well as my parents proof of ID and income.

Am I right in thinking that this has nothing to do with the sale of the house, which is between the owner and myself.. where I get extra money from is irrelevant.

Thanks in advance,

Wiley25

ognum

this may be something the mortgage company require, if they believe you are maxed out as far as lending is concerned or were unable to meet the deposit criteria.

The mortgage company may require your parents to state this is a gift rather than a loan as if you stop paying the mortgage and they repossess they do not want any other claims on the propert apart from theirs.

So sorry if you are taking a loan they will ask the questions and as you state yourself you are not being entirely open and honest, if it's a gift then that is what it is with no strings attached. if is a loan the there are implications. you and your parents need to be honest!

wiley25

In the eyes of the law this is a Gift, of course I will be paying it back at some point in my life but there are no conditions.

I have no problem with the Deed of Gift, it is more the fact that the solicitor is asking for my parents proof of income. Am I right to suggest that that is no ones business apart from my parents, as they are not directly involved in the purchase?

ognum

Proof or ID and where the money has come from is always requires under the money laundering laws.

your parents just need to forward a copy of Thier passports and state that the money has come from earned income, inheritence or whatever.

ognum

To avoid your parents involvement they should have gifted you the money a year or so ago and you would have had it in you account and could have accounted for it yourself.

ognum

Once you have stated that money for the purchase is coming from your parents they will have to show proof of where funds have come from.

wiley25

Thanks for all the help.

One last point, isn't this something I should be showing the bank and my solicitor should have nothing to do with?

ognum

your solicitor is responsible for ensuring you are not money laundering!!!!

ognum

google House purchase and Money laundering to read up on it If I remember it's to do with a 2007 Act.

wiley25

Thanks, any idea where I can get a decent layout of a Deed of Gift.

I've searched on google but they are all specific to certain companies.

I am after a blank format that me and my parents can fill out.

Thanks

zzzLazyDaisy

Your solicitor should deal with the deed of gift. Apart from anything else, it is very likely that the lender has a preferred format.

I do find it a little strange that you seem to be wanting to put a lot of obstacles in the way of your solicitor doing their job. These steps are perfectly normal in these situations.

Any sort of 'under the table' arrangements to do with the funding of a purchase is fraud, as all funding arrangements must be disclosed to the lender, and also the solicitor must to comply with the money laundering laws, which require the provenance of the purchase money to be disclosed and evidenced.