Gifted deposit and halifax mortgage

Abu-Dina

Sorry to keep asking so many questions!

About 8 months ago we wanted to apply for a mortgage and my sister gifted us £15k for our deposit. At the time we went with Santander but unfortunately we were declined a mortgage due to my partner not meeting the minimum employment requirements (she'd been in her job for one month and they wanted 3 months payslips).

Anyway, fast-forward 8 months and after saving as much as we can, we got a mortgage offer from Halifax 85% LTV on a £162k.

Actually it was for a property worth £160k so we've not changed the loan amount but will pay the extra ourselves meaning we're paying 16% deposit = 26k

The mortgage offer has been made and we've also passed a random internal audit but now the solicitor wants to know the source of the deposit? Why is this required at this stage? Shouldn't the bank request this before a mortgage offer?

I'm confused!

kingstreet

Is it a request from the lender, or the solicitor's money laundering check?

BTW the mortgage offer and contract paperwork have to reflect the same purchase price. You can't have one document saying one figure and another saying something else...

Abu-Dina

kingstreet wrote: »

Is it a request from the lender, or the solicitor's money laundering check?

Halifax did not request proof of deposit when the mortgage offer was made although the mortgage broker enteretd the source of deposit as savings because when we did the full application we gave him a bank statement showing the amount required for the deposit.

kingstreet wrote: »

BTW the mortgage offer and contract paperwork have to reflect the same purchase price. You can't have one document saying one figure and another saying something else...

Sorry for the confusion. Initially we got an AIP for a peoperty worth £160k based on 85% LTV. However, we then found another peoperty and negotiated the price down to £162k. As we didn't want to borrow more money we told the mortgage broker that we would pay the extra deposit. Halifax are aware of the price and their valuation matched our offer price. Does that make sense?

kingstreet

So it sounds like the solicitor's money laundering check and nothing to do with Halifax. You can often find you are asked for ID, proof of address and proof of deposit by broker, lender and solicitor as we are all required to add to the "audit trail" for money laundering purposes.

I now understand your comment about the purchase price.

Abu-Dina

kingstreet wrote: »

So it sounds like the solicitor's money laundering check and nothing to do with Halifax. You can often find you are asked for ID, proof of address and proof of deposit by broker, lender and solicitor as we are all required to add to the "audit trail" for money laundering purposes..

Yea that makes perfect sense but my worry is that the mortgage broker had enterted savings as the source of deposit, Halifax then processed our application (now also found out that our application was randomly pciked out for auditing and passed).

If now we tell the solicitor that part of that money was a gift that we got 8 months ago, would that ring alarm bells and cause the mortgage offer to be pulled etc...

kingstreet

What exactly is the solicitor asking for?

Presumably they only want a statement showing the deposit in an account?

Are they asking to see the deposit building up over a protracted period?

Abu-Dina

kingstreet wrote: »

What exactly is the solicitor asking for?

Presumably they only want a statement showing the deposit in an account?

Are they asking to see the deposit building up over a protracted period?

When we received the solicitor's pack, it included a questionnaire that we had to complete and return back together with IDs, proof of address etc. One of the questions was source of deposit. I ticked the gifted deposit box. Maybe I should have ticked both gifted and savings?

Halifax didn't ask for this information when they sent the mortgage offer nor did they ask for it when they audited the case.

So the question is, do the solicitors communicate this information back to the lender and if so, would the lender get concerned if they then check the application to see deposit from savings and solicutor saying it's a gift? or am I just worrying too much over nothing?

kingstreet

The solicitor does have to report a gifted deposit.

I actually called a solicitor yesterday. My client's parents are gifting him the deposit and I wanted to run it past the solicitor. I have a gifted deposit letter, but wanted the solicitor's view.

The choice was;-

- go the gift route, then the solicitor wanted to see the parents and to report it to lender, which I'd already done anyway
or
- have the money transferred into the client's account and provide a statement from that account as the proof of deposit.

As the parents live in Southampton and the solicitors are in Stourbridge, guess which we chose...?

GMS

Solicitors will report the source of deposit to the lender as it is not from own resources. It is up to the lender to then decide how to proceed.

You will need to get a letter from the donor stating it is a non refundable gift and no interest in the property etc.

Abu-Dina

Getting a letter is not a problem at all. In fact the gifted amount has been in one of our acconuts for the last 8 months and last month we added the rest (mixture of savings and saleof some prized possessions.. booohoooo!)

I guess we'll have to wait and see. I just hope we don't fall at the last hurdle, that would be devastating!

Thrugelmir

Abu-Dina wrote: »

Halifax didn't ask for this information when they sent the mortgage offer nor did they ask for it when they audited the case.

The solicitor represents both you and the bank throughout the process. So from the lenders perspective easier for the solicitor to handle matters such as verification of the deposit.