Mortgage deposit - gift from overseas parents 30 November 2014 at 9:54AM in Mortgages & endowments 15 replies 19.4K views

insideoutsider

Hello all

I'm about to buy a house :j

My mom and dad are non-UK residents and citizens of another country and they will be giving me the deposit of £15k as a gift. The money is in USD and can be transferred in one go.

I am a uk-citizen and resident, I work full time and I claim child and working tax credits and have savings of only about £2k.

1. Are there any issues with receiving money from overseas parents to pay deposits?

2. Is it best to transfer the money to my account first or the solicitors account?

3. If it is paid to my account, will it be counted as income, will it affect my benefits or will it be taxed?

4. Should I be worried about anything else with regards to this?

Please advise on how you would go about this.

Thanks in advance.

Caz3121

you will be asked the source of the deposit and you will need to declare this is a gift. Having a gifted deposit may reduce your options for lenders as you have not been able to demonstrate that you can save your own deposit. Your parents may be asked to confirm in writing that this payment is a gift and will not require to be repaid and they will have no claim over the property

amnblog

Expect to be asked to provide a letter from your parents confirming this is a gift.

This needs to be in the right format - for a suitable format please PM me and I will send you a link.

Expect to be asked to prove the funds via a bank statement or similar (not necessarily in your own account - can still be in your parents accounts).

Expect to provide ID for your parents. Expect your parents to be asked to give the lender permission to put their ID on file.

mandm65

If i recall correctly our lender did not ask for anything it was our solicitor who requested the source/evidence for the gifted deposit, must say it was a few years back.
Its quite possible that solicitor’s request was to fulfil the lender’s requirements.

insideoutsider

Thank you for your replies.

What about if I don't declare this as a gift from my parents? If it is paid into my account and then transferred to the solicitors account, is there any problem with this?

Will the solicitor ask me to account for every penny in my bank accounts?

I'm just trying to avoid endless emails and proofs if I dont need it.

thanks again.

Thrugelmir

insideoutsider wrote: »

Thank you for your replies.

What about if I don't declare this as a gift from my parents? If it is paid into my account and then transferred to the solicitors account, is there any problem with this?

Will the solicitor ask me to account for every penny in my bank accounts?

I'm just trying to avoid endless emails and proofs if I dont need it.

thanks again.

If you want a mortgage then best to have all the relevant documentation to hand. Along with being honest when asked questions. As no one is playing games except for you. Trust is a key element of any financial relationship.

If everything is above board then should be a straightforward matter.

insideoutsider

Thanks, but I'm not playing games at all.

I thought that once I had the money to put down, I'll do so and carry on and not have to go through all sorts of things to pay it. I thought it was all a matter of transferring money to myself or solicitor and case closed. So I'm looking for the simplest route to get things done. Asking my parents for more than the money to asking for letters, bank statements and the likes is just difficult.

Also, I have some money cash in USD - saved in a security box over the years (in case of an alien invasion ) can I use some of that or will i be asked for evidence of earnings of that too.

Sorry if my questions seem daft but I come from a long line of believers in cash. If I can't see the money, perhaps it's been stolen! I know it's silly but I bet the 15k from my parents is just sitting in some box somewhere!

Contemptuous

insideoutsider wrote: »

Thank you for your replies.

What about if I don't declare this as a gift from my parents? If it is paid into my account and then transferred to the solicitors account, is there any problem with this?

Will the solicitor ask me to account for every penny in my bank accounts?

I'm just trying to avoid endless emails and proofs if I dont need it.

thanks again.

And what will you do if the lender's Underwriters ask for evidence of the funds building up? All you'll have is a lump sum transfer showing on your statement.

Surely honesty is the best policy?

Not all lenders will ask for "endless emails", your parents' ID etc. but not being truthful about the source of this money will only cause problems.

CLAPTON

insideoutsider wrote: »

Thanks, but I'm not playing games at all.

I thought that once I had the money to put down, I'll do so and carry on and not have to go through all sorts of things to pay it. I thought it was all a matter of transferring money to myself or solicitor and case closed. So I'm looking for the simplest route to get things done. Asking my parents for more than the money to asking for letters, bank statements and the likes is just difficult.

Also, I have some money cash in USD - saved in a security box over the years (in case of an alien invasion ) can I use some of that or will i be asked for evidence of earnings of that too.

Sorry if my questions seem daft but I come from a long line of believers in cash. If I can't see the money, perhaps it's been stolen! I know it's silly but I bet the 15k from my parents is just sitting in some box somewhere!

in general when you apply for the mortgage, they ask the source of your deposit : to be untruthful is fraudulent:
they may or may no ask for proof i.e. savings/bank statements

amnblog

Don't try to be 'clever' or you won't get your mortgage.

insideoutsider

Thanks for your replies.

I guess you're in another league when your naivety is confused with being clever!

Here's the honest truth. I've got part deposit in bank, saved by me, part in cash in a box saved by me and if I needed more, mom n dad would jump to my rescue hence the 15k.

Perhaps i should have been clever and keep the money in the bank sooner.

So let me ask again, pls put aside your thinking I'm trying to be dishonest and smart for now... if I have some of the deposit in the bank, evidenced by bank statements as saved by me and my parents gave me some of the deposit, will I still be asked to give reasons why my parents gave me x sum of money?

Sorry if I'm just not getting it.

I never thought I'd be buying a house alone but it's happening and I can't seem to wrap my head around this bit!

Thanks for your patience.