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.

kingstreet

This is likely to be a solicitor requirement, not that of a lender, as it is not widely required. Such cover is normally only available to solicitors so I expect your ability to shop around will be minimal.

Flashmanchop

It will be a policy to cover the solicitor as they are the ones who will be sued by the mortgage compnay should these funds turn out to be of spurious origin. Personally, I wold either find another solicitor, or just accept it, as I feel, ultimately, this policy may smooth things through for your son.

holly_hobby

As he will have already have satisfied ML regs to actually accept the funds, this is essentially in relation to any subsequent bankruptcy order for parents (where there may be a claim on the donated funds), and as such is more a belt and braces approach than anything reflecting directly on parents themselves.

As stated by the guys, unless your Son changes his solicitor to one whom will not require this indemnity, (which won't be cost effective at all !), he is stuck with paying the £180 I'm afraid (as I doubt the solicitor may accept him sourcing his own policy in any event).

Sorry this wasnt' more positive for you, but at least hope explains the basis of the policy requirement.

Hope this helps

Holly

worriedmam

Thanks very much everyone for your replies- much appreciated.

amnblog

holly_hobby wrote: »

this is essentially in relation to any subsequent bankruptcy order for parents (where there may be a claim on the donated funds), and as such is more a belt and braces approach than anything reflecting directly on parents themselves.
Holly

nails and heads come to mind - well done Holly