Mortgage deposit - Inheritance

ch3101

Hi guys,

When I was 18 I inherited 6800 from my gran's will, she died when I was 4. Now, I have a brother in the same position and we both added another 700 to make it a nice 7500 each and invested it with StJames' Place, earmarked as a house deposit when we leave uni etc.

My question is that you hear stories about lenders not accepting the fact people's deposits are gift and things, would they accept this as a deposit only or would I have to add to it from my savings?

Unfortunately I don't have much experience with mortgages and their lending criteria but do understand the financial sector due to work.

opinions4u

If it's invested in your name it's your savings. So you won't have a problem.

St James Place is a high charge adviser with access to limited funds. I'd suggest giving consideration to them being a suitable place for cash that you want for a house deposit in the near future.

Annisele

Lenders do have issues with gifted deposits - but the sort of gift you're talking about isn't the kind that generally causes problems.

Gift from the person you're buying the house from? Problem - as it looks like you're artificially trying to mess with the price of the house.

Gift from your partner, who you're going to live with but isn't named on the mortgage application? Problem - as the partner might end up with rights to the house, and make it difficult for the bank to repossess if you don't pay the mortgage.

"Gift" with the expectation you'll pay the money back? Problem - it isn't really a gift.

Gift from somebody you don't know / some random person outside the UK? Potential problem - money laundering issues.

There are at least two potential problems with your plan:

1. £7,500 plus/minus some investment growth/loss might not be enough for a deposit at the time you want to buy; and

2. Some lenders do like to see that you're capable of saving some money for yourself - but if this money has been effectively yours since you were 4, I think you'll be OK.

ch3101

Cheers guys!

I save 200-250 a month anyway so showing that i can save will be fine (income is 560 a month).

It's with StJames Place but in "safe" investments. Had to pay 5% but the first year it is up by 6% so that cancelled that out. I trust them though, they have our parents' money as well and have done well with it.

I'd be looking to buy in about 4 years time anyway so hopefully that'll be ~10k and i can add about the same from my savings. Otherwise if I get a job near the family home I'll stay and save >1000 a month for a year to top it up.

Thanks

ViolaLass

ch3101 wrote: »

Cheers guys!

I save 200-250 a month anyway so showing that i can save will be fine (income is 560 a month).

It's with StJames Place but in "safe" investments. Had to pay 5% but the first year it is up by 6% so that cancelled that out. I trust them though, they have our parents' money as well and have done well with it.

I'd be looking to buy in about 4 years time anyway so hopefully that'll be ~10k and i can add about the same from my savings. Otherwise if I get a job near the family home I'll stay and save >1000 a month for a year to top it up.

Thanks

So you've gained a whopping 1% in a year when the markets have been doing fairly well.

ch3101

ViolaLass wrote: »

So you've gained a whopping 1% in a year when the markets have been doing fairly well.

Indeed, in 1 year. However over 5 years I'll have gained about 2000 by very simple calculations.

I did look at all the funds they offered and their past etc before making my decision. The funds I have my money in have all earned ~5% every year for 20, better than a bank account.