gifted deposit

agonyjohn

We were gifted a deposit 3 months ago (so has been sat in our savings for that time) we were asked where the deposit was on application for mortgage so informed them in our account (nothing else asked).

We got conditional offer from natinwide within 1 week but wanted to see bank statements of saving account. Is this a routine check? they have not asked about it being gifted etc and we didnt realise we had to declare it until i saw on a few posts.

What actions should we take, all deposit gifted by Other halfs parents? will this be an issue with application?

bigadaj

They have a duty to check the source of the deposit, shouldn't be a problem. Probably best to ask your partners parents to draft up a brief letter confirming that the deposit is a gift, and there are no strings attached, job done.

agonyjohn

thought as much, always get a bit jumpy about these things as think its not going to go through!! thanks for reassurance.

holly_hobby

Nationwide will just want evidence of the depost being held in your account, but you should disclose to them now as part of their uw checks.

Its the conveyencer whom will ask for evidence of the source of deposit (ie parents bank statement) as part of their standard money laundering checks.

Furthmore, as its a gift your parents in law will have to sign a disclaimer, confirming the gift is non-conditional with no repayment requirement - all completely standard and nothing to worry about.

Hope this helps

Holly

agonyjohn

well its been in our account for 3 months, would they really want to check my in laws bank statements? - just asking they would be quite happy to show that they had it saved...

holly_hobby

Well you haven't saved it, unless you fib and say you have, but the sol will want to know where the lump sum was before it appeared in your account 3 mths ago.

Its important to understand that this is to administer money laundering checks - which is a legal requirement of the solicitor, and to which they may ask for whatever evidence they feel necessasry to satisfy the requirements, and their acceptance of the source. Typically in cases of gifted monies, they want to actually see the financial transaction/tsf between the parties accounts, which can mean a bank statment from the donor, in excess of 3 mths, 6 mths etc from the date of the gift .... if requested its non-negotiable I'm afraid.

They may also ask for an indemnity policy re the gifted depost, which is in respect of deprivation of assets in the case of future bankruptcy of the Donor ... some sols don't bother with this, but some do as a belt and braces exercise.

Hope this helps

Holly

agonyjohn

thanks for advice - we are going to discuss with our mortgage advisor tomorrow and let them know the situation. Dont want it all to fall through due to a misunderstanding...especially if it will get highlighted by the solicitor... will this mean we have to provide our bank statements to solicitor also?

sparkstertom

It won't be a problem in the slightest... My savings account has an extra 5k in it in the form of a gift from my folks for our wedding and they jumped right on it.. "will it be a gift?", "will you have to repay it?".

We just asked my folks to write a letter to confirm that they had no interest in the property we were buying, nor did they expect any kind of recompense for the gift..

It's just the mortgage company being thorough....Money laundering an' all that!

^^as holly said above...a lot more eloquently!

Gentoo365

It is nothing to worry about and is pretty much a 'tick box' exercise by the mortgage company covering their backs.

If the money is from a savings account they will want to see if the money has built up over time or gone in as a lump sum. If it is a lump sum they will want confirmation that the money was not a loan, and that whoever gifted you the money is not planning to live in the house, or take any financial interest in it.

The letter should be something like this:

For the attention of [bank]

I am [my name]'s father

I [parents name], can confirm that I have gifted the figure of [amount] and understand that it will be used towards the purchase of the property:

[property address]

This gift is non-repayable and I will have no interest in the property, either on completion or in the future. I will not be living in the property. I will not be imposing a second charge, and having sought independent legal advice, understand the implications of this.

However you should check if they have a specific template, or want specific wording.

holly_hobby

The conveyencer checking the source and trail of deposit is a ML requirement.

The lender checking whether its gifted or not, is to do with beneficial ownership, if the donation is to be made with reservation or consideration of any kind.

So, 2 different checks with difference requirements

Hope this helps

Holly

agonyjohn

thanks for all your advice, other issue is that when looking at banks statements we were given money, as a gift, to help with stamp duty and because we want to fit a new kitchen and bathroom. Will this be an issue?