Gifted Deposit Indemnity Insurance

worriedmam

My son has had his offer on a house accepted and his mortgage approved subject to the valuation report. We , his parents, are giving him his 5% deposit (£10,000). He has just been told by his solicitor that he has to pay £180 for an indemnity policy for the gifted deposit.
I've never heard of this before. Is this usual with gifted deposits and can we shop around for a cheaper price as £180 seems a lot of money. Thanks for any advice you can give me.

zzzLazyDaisy

This article explains the reasoning behind the demand for the policy. Hopefully someone more knowledgeable than me will be along soon, but my first thought is that they may wish to consult an independent mortgage broker who may know of lenders who don't impose this requirement across the board (although there may be a kick-back if the mortgage is on less favourable terms).

http://www.mortgagestrategy.co.uk/conveyancing/ftbs-stung-by-insurance-costs-for-gifted-deposits/1033911.article

Edit - I don't know for certain, but I imagine that because this is a lender imposed requirement, they may also insist on a certain level/type of cover which may leave you with little room to shop around - but in any case the figure you quote seems to be about par for the course.

Angelicdevil

I didn't have to take out an indemnity policy for my gifted deposit last year.

Not that that helps but if it's a lender imposed requirement, look for another lender who doesn't.

worriedmam

Thanks everyone for your replies- much appreciated.