Gifted deposit letter

Docdedwin

Hi all. I'm currently going through a first time buy to let mortgage with gifted deposit. We are currently stuck in a catch 22 position.

Firstly, my bank will not allow the mortgage to go through unless they receive a letter from the solicitors stating that the gifted deposit is a gift and will not be required to be payed back.

However, on speaking to my solicitors this is something that is normally done once the mortgage is approved and will not provide the letter until thy have been instructed by bank to proceed.

And again, however, the sellers solicitor says it should go through our solicitor first and sent to them which is then sent to my bank.

As anybody else had anything similar and how do I get around this??

kingstreet

A gifted deposit letter should be prepared by the donor, addressed to the lender and signed and dated.

Then it should be passed to the lender and/or the solicitor.

What has happened so far?

Paully232000

I do not know about the BTL part of it, but we recently had an issue with gifted money on a bank account statement that we sent to our mortgage provider on application.

It was a fairly large gift but not part of our deposit (we had already proved that we had this). We had to get the person who gifted the money to send a letter to the mortgage company stating that the money was a gift, we did not have to pay it back, and did not form any part of a claim on the house we were buying. We got the mortgage after that.

drdpj

The solicitor doesn't have to do it at this stage, you can get the people gifting the deposit to do it themselves, it must say something like this:

http://www.slough-mortgage.co.uk/examplegifteddepositletter.html

That should be enough for the agreement in principle

d.

Docdedwin

Thanks for your quick replies.

Why are they requesting it goes through the solicitor before??

ATM the mortgage is going through the processing stage but the underwriters will not process the mortgage any further until they receive the letter.

The gifted deposit is not a cash deposit, more from the equity of what is available from the house being sold by a family member.

I keep being told different things. The bank say they require a solicitors letter, but the solicitors are passing it on to each other even though neither of them are actually representing anybody yet because the mortgage has yet to be agreed!!! Arrggghhhh:mad:

kingstreet

We did a concessionary purchase just before Christmas and did it exactly the same way as we do gifted deposit in cash.

Get the donor to write the gifted deposit letter and give it the purchaser's solicitor and/or the lender.

This should have been done before the mortgage application was submitted.

If they aren't already aware of it, tell everyone this is a concessionary purchase, not a gifted deposit and things might calm down a bit. If you are using a lender not familiar with this process, you need to follow its instructions. Square peg, round hole etc. How was the lender selected?

JennGa

We had to do the gifted deposit letter with the application before our broker would submit it.

kingstreet

JennGa wrote: »

We had to do the gifted deposit letter with the application before our broker would submit it.

Quite.

Six Ps.

Proper planning... etc