Is this a gifted deposit???

NewBe

Just wanted to ask advise about deposit on behalf of Niece.

She has savings of £75k which she saved whilst she had a higher paying job. Due to a lower paid job now, she can only get a max mortgage of £100k.

She has seen her perfect house but at £200k, leaving her £25k short. As both parents are retired and don't have much savings, her siblings (all home owners) have offered to contribute £5k each to help with the deposit.

Therefore, her deposit will be made up of £75k of existing savings, and £25k deposited from 5 siblings.

It would have been much easier if the additional money came from 1 or 2 siblings, but they don't enough in their accounts.

So is the above scenario likely to cause any issues? Is it classed as a gifted deposit or part-gifted???

Thanks.

Thrugelmir

The number of donors should not be an issue. Providing that they meet the specified criteria for the money gifted.

betmunch

If the money coming from the siblings doesn't require paying back they are gifts.


I would say its a deposit from savings and gift.


If you invent the term part-gifted I would expect a lender to interpret it as some of the money needs to be given back.

capwhitt

Any forms I have had to fill in have had options for multiple gifts. Some banks may ask for a letter signed by the gifters to say how much they will give her, they will have no interest in the house as a result, and they will not be paid back. There is not normally a rush on this but be aware if there are multiple gifters - one going on holiday without giving the letter first may slow things down.

sam2015_2

Check with the lender. Some will only accept 2 gifts deposit.

capwhitt

sam2015 wrote: »

Check with the lender. Some will only accept 2 gifts deposit.

I wouldn't see this as a barrier though. As long as the money is moved around in advance of the purchase. The reason the banks like stuff in writing is because if you fall out with the gifters and they start claiming it was a loan not a gift then the legal issues ensue. If you can trust this won't happen then no worries. I'd say honesty is best but if they restrict you then you might have to be creative.

libf

capwhitt wrote: »

I wouldn't see this as a barrier though. As long as the money is moved around in advance of the purchase. The reason the banks like stuff in writing is because if you fall out with the gifters and they start claiming it was a loan not a gift then the legal issues ensue. If you can trust this won't happen then no worries. I'd say honesty is best but if they restrict you then you might have to be creative.

Being creative will probably lead to falling foul of money laundering regulations.

capwhitt

libf wrote: »

Being creative will probably lead to falling foul of money laundering regulations.

Not THAT creative. There is no legal reason why in advance of everything any of them can't give you a gift and NOT declare it as a gift.

Let_Us_See

capwhitt wrote: »

I wouldn't see this as a barrier though. As long as the money is moved around in advance of the purchase. The reason the banks like stuff in writing is because if you fall out with the gifters and they start claiming it was a loan not a gift then the legal issues ensue. If you can trust this won't happen then no worries. I'd say honesty is best but if they restrict you then you might have to be creative.

This is not good advice.

Moving money to obscure source could be seen as Money Laundering and lenders will require written proof that funds towards a deposit are gifted and non-refundable. Also, confirmation of the source of deposit will usually be requested by lender and solicitor.