Bank being rather odd - Mortgage (and deposit issues)

Tygermoth

Posting on behalf of a friend as she called me upset and I have no idea...I have never bought a house!

My friend circumstances suddenly changed for the better and she has decided to buy a house as her parents offered to pay her deposit. House offered on AIP granted all moving along well.

So she pops in to the bank today to sort out some paperwork and the bank got all odd over a loan she has. The loan was taken out six months ago. now the loan amount is near enough the same amount as the deposit for the house and the bank seem very spooked by this. This loan was included in the outgoings when doing the aip with nothing mentioned and no issues raised however today they seemed to infer my friend was using the loan as the deposit.

Now as it is the deposit is gifted by parents and a birthday present and the bank seemed to imply that they took out the loan gave it to the parents who then are gifting it back. (I am sure the bank staff would not have been as rude as she said however my friend was adamant that they we very accusatory)

1. she is popping in to the bank today with the details of the items purchased with receipts to prove the loan was spent in its entirety.

2. The parents have called the bank and asked them to note they have not accepted any monies from her and the money being gifted to her can be demonstrated as being accrued over time in a savings account. (The bank quite rightly refused to discuss any thing with them for DPA reasons as the daughter was not with them to agree which made them even more angry lol)

Apart from the bank confirming that the afordability of both the mortgage and the loan is not the issue its the provenance of the deposit that they are unhappy with... suddenly they have gone quiet and her calls are presently not being returned.

Understandably they have a house riding on this so a very worried. How easy is this to clear up?

G_M

Go in as you suggest but take parent aswell as receipts!

Bank will either approve or withdraw the mortgage in principal.

Tygermoth

The bank are not returning her calls and when she went in this afternoon she was told they would 'be in touch'

So all she is doing is panicking as the house she is purchasing is perfect for her but she knows there is another buyer impatiently waiting in the wings to snag it if she falters.

To ramp up her nerves the sellers have been calling her all afternoon leaving messages to get back to them and she doesn't want to call them just in case they pick up from her that something wrong (yes, your not wrong she can be a bit of a drama llama but a lovely lass on the whole)

Guest101

Perhaps someone can explain the problem to me, as I seem to have missed something. This loan isn't 'secured', and if it had been with another bank they wouldnt have known what it was for, so why does it matter what she would use it for? - sorry bit ignorant on this point.

But the good news is, her parents can prove they are gifting her the money;

hazyjo

Because lenders generally aren't allowing borrowed money to be a deposit.

If your friend has a loan, it will affect what she's offered. I presume she's not yet paid it back? It's not looked on particularly favourably, especially if she's being gifted the deposit and hasn't actually saved anything (has she? Presuming not) and is has taken out a loan to pay for something. It makes her seem quite a risk when you think about it...

Jx