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Gift deposit from uncle not accepted by lenders

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  • mgdavid
    mgdavid Posts: 6,710 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    don't tell 'em Pike
    (how did they know it was a gift?)
    The questions that get the best answers are the questions that give most detail....
  • tvfreek
    tvfreek Posts: 142 Forumite
    There is a standard letter - probably existed for 5 years plus now which confirms the funds are a gift and that the donor will have no legal interest in the property.

    It must come from the person making the gift.

    I notice a few people go with the Leeds - tricky lender in my book I've used them once in 8 years and that was for 4 applicants so not much choice really at teh time. Dislike the 5.99% SVR Ouch!!
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  • kingstreet
    kingstreet Posts: 39,268 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Leeds SVR is 5.69%, Accord's is 5.99%.

    Both are a good reason to avoid the lenders in question. When you can.

    Leeds is useful for sub £80k 95% newbuild shared ownership. I wouldn't dream of using them for anything else.

    I only linked the gifted deposit stuff because I'd seen it earlier in the week.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    mgdavid wrote: »
    don't tell 'em Pike
    (how did they know it was a gift?)

    So you would propose lying in answer to any questions asked?
  • ML420cdi
    ML420cdi Posts: 67 Forumite
    Ninth Anniversary 10 Posts Combo Breaker
    Your_Hero wrote: »
    Lenders don't like this as you have found because it may not be a true gift from your uncle or aunt. It is difficult to prove this would be a true gift and the lenders are wary that you may need to repay this back or creates a charge on your property. After all, why would someone give you £75,000 for free?

    This gift causes problems as they may have an interest on the house and could create ownership issues if the house needs to be repossessed and the lender may themselves in all sorts of trouble.

    Perhaps your uncle could buy one in his name and you could pay the mortgage? Eventually when your credit is ok, then you can buy him out with a mortgage in your own name.

    Wouldn't the Mortgage lender have a 1st Charge on the property thus negating any other possible party claiming an interest?
    "Killing Jesse James don't make you Jesse James"
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    ML420cdi wrote: »
    Wouldn't the Mortgage lender have a 1st Charge on the property thus negating any other possible party claiming an interest?

    Not the property that's at issue. It's the funds that provided the deposit. The property can be forcibly sold in order to repay them. Insolvency Act 1986 springs to mind as one such piece of legislation.
  • tvfreek
    tvfreek Posts: 142 Forumite
    kingstreet wrote: »
    Leeds SVR is 5.69%, Accord's is 5.99%.

    Both are a good reason to avoid the lenders in question. When you can.

    Leeds is useful for sub £80k 95% newbuild shared ownership. I wouldn't dream of using them for anything else.

    I only linked the gifted deposit stuff because I'd seen it earlier in the week.

    Thanks for clarifying on the rate I knew it was high and why I avoided them both.
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  • tvfreek
    tvfreek Posts: 142 Forumite
    Thrugelmir wrote: »
    Not the property that's at issue. It's the funds that provided the deposit. The property can be forcibly sold in order to repay them. Insolvency Act 1986 springs to mind as one such piece of legislation.

    Probably the Law of Property Act 1925 in this case - the act you quote would be for personal insolvency not a mortgage default and repossess.
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  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    edited 25 August 2014 at 4:20PM
    tvfreek wrote: »
    Probably the Law of Property Act 1925 in this case - the act you quote would be for personal insolvency not a mortgage default and repossess.

    Creditors can legally recover funds from debtors. The fact that the money was gifted to a third party is of no relevance. Hence why source of funds is so key to the mortgage lender.
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