Gifted deposit not accepted by lender.

Bencullen1

Good afternoon all,

I have just received a phone call from my mortgage advisor stating that although we are quite far into the purchase of our new home the mortgage company has decided that they cannot accept our deposit as it is a gift from my step father who is not a blood relative.

This has come about 8 weeks into the process after an offer in principle and all fees except the purchase fee has been paid.

I do not know what to do now.

Any thoughts, help or advice would be greatly appreciated.

Regards,

Ben

kingstreet

Did the broker position this with the lender prior to submitting the application?

No way your mother could be the donor instead, or jointly?

Has the broker tried to get this decision overturned by his BDM?

Is the broker looking for a new lender and offering to cover any new fees?

Bencullen1

The broker did position this with the lender prior to submitting and they were going to accept but they have now decided that it must be a "blood relative"

Sadly my mother passed away earlier this year so that is not an option.

I haven't spoken to the broker again yet as I wanted some advice before calling him back.

Thank you.

kingstreet

This is in your broker's court to resolve.

Not much else anyone can suggest, TBH.

Senior_Paper_Monitor

Who are the lenders - Santander is my guess ?

Bencullen1

It's Leeds Building Society if that helps.

kingstreet

Leeds criteria is clear;-

Gifted Family Deposit: Gifted deposits from family members as defined by the regulator (spouse, parent, grandparent, sibling, child or grandchild) will be considered for mainstream residential lending. The individual gifting the deposit must be resident in the UK and will be subject to routine bankruptcy searches. The Society requires completion of the ‘Gifted Deposit Form’ which can be obtained from our web site and should be submitted with the application.

So hopefully, the broker has an email from their BDM or a transcript of a phone call to demonstrate he boxed this off before the application was submitted.

amnblog

Bencullen1 wrote: »

It's Leeds Building Society if that helps.

It rarely does

Zoology_Dragon

I'm surprised that step-parents aren't considered to be parents for this purpose. Not that this helps you at all. I do hope it's resolved in your favour in any case.

amnblog

Stick around - our market is full of surprises (rarely nice ones)

Senior_Paper_Monitor

As amnblog says - Leeds is not good news (not the easiest company to deal with on underwriting issues).


I have difficulty understanding the criteria (which Kingstreet quotes for you) as the FCA do not define the definition of familiar member as far as I can recall or identify. I would be pretty confident that each lender sets its own policy in this.


I am equally confident that many lenders will be fine with the 'step father' if your broker can't shake this out with his/her Leeds BDM.