FTB gift deposit

pbug

Hi all,


We're (hopefully) midway through the purchase of our home (we have been renting the property for almost 5 years) from our landlord, and a portion of our deposit has been gifted to us from parents and has been in our bank accounts now for almost 3 months.


Our mortgage application is currently in progress with Platform. Everyone that has gifted us money has signed Declaration of Gift forms, per Platform's request, declaring no stake/entitlement to the money or the house, but our advisor says that Platform need our parent's bank statements, showing the money.


I'm interested to know why? My father's view - and I'm inclined to agree - is that with their form signed his bank account is no longer relevant, and he is not happy to have his finances pored over in a matter that, as he has signed, is not his business.


EDIT : I've looked through the forum here and haven't found any examples where anything more than the Declaration of Gift has been needed. In some cases insurance has been requested from the solicitors, but there has been no mention of that so far from our advisor.

kingstreet

They want a fuller audit trail against a future allegation of money laundering or insolvency?

Asking for donor bank statement as well as signed gift letter/form is perfectly normal in the mortgage market.

kingstreet

FWIW here's Halifax requirements for gifted deposit on shared equity cases as an example;-

Gift

You should obtain a letter written by the donor that meets all of the following requirements:

Addressed to Halifax
Dated within the last three months
Details the person/people gifting the deposit and the current name and address of the applicant(s), together with the property being purchased
Confirms the relationship between the donor(s) and the applicant(s). The donor should be a family member. See definition of family member below.
Details the donor’s full address and is signed
Confirms the amount of the deposit, that it isn’t repayable and that the donor will hold no interest in the property following completion of the mortgage

The source of the deposit.

You should also provide a bank statement or passbook from the donor showing the deposit funds being transferred out of the account. Alternatively, the donor may provide a letter from their bank confirming that the funds have been transferred. Additional statements may be requested where required.

The definition of a family member is someone who is related to at least one of the applicants:

by birth/blood relative
by marriage or civil partnership (including step children, adopted children and in-laws)
as ‘Common Law’ partners or co-habitees.

Gifts from friends or employers are not acceptable.

ACG

I am assuming we are talking about a significant amount and not a couple of thousand? (ie tens of thousands?)

Its most likele money laundering checks.

I can be brutally honest as your not my client, if you were my client I would find a way to tip toe around it but ultimately what you or your father think is irrelevent. You want the lenders money, they need to do what they need to do in order to be 100% comfortable that you are a good risk, you/your dad is not trying to pull a fast one and they are not assisting with money laundering.

If you/your dad does not like it, then you need to find a new lender.

I have had a different lender do this and the applicants mother was adamant she would not do it. Lender would not back down and we had to find a different lender. Its all part of the process and if it is a significant deposit, the broker should really have checked before submitting. I have one on my desk at the minute and I have checked with 2 lenders what their stance would be and put both options to the clients, clients happy with fussier lender as they are getting a better rate.

pbug

That all makes perfect sense, thank you for your help.


I have raised it with our adviser and asked if there is any way around this. The amount of the gift is £5k, which would be approx. 3% of the house value, so I don't know if that crosses some threshold where it needs to be audited further?


Additionally, if there is a way to avoid it, it will speed up our application no end. Ho hum.

ACG

Im surprised they are wanting statements for £5k.
I have submitted cases to platform with similar gift amounts and a letter was sufficient. Unless they have changed their rules on that front?