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Cash Mortgage Deposit

BATDAN
Posts: 7 Forumite
Hi,
Myself and my partner are first time buyers. We've recently been granted a mortgage through a mortgage advisor and told to start our property search. However £30,000 of our deposit us currently in cash sitting in a safe at her mum's house, built up over many many years. (Why she never trusted a bank with it I don't know).
Now we're being asked for proof of deposit and how it was built up for money laundering checks. Now I'm sure no one's going to accept £30k in cash and even if we deposit in into our account as a cash gift for a parent it sounds like they want to see 12 months history. What can we do?
Thanks
Myself and my partner are first time buyers. We've recently been granted a mortgage through a mortgage advisor and told to start our property search. However £30,000 of our deposit us currently in cash sitting in a safe at her mum's house, built up over many many years. (Why she never trusted a bank with it I don't know).
Now we're being asked for proof of deposit and how it was built up for money laundering checks. Now I'm sure no one's going to accept £30k in cash and even if we deposit in into our account as a cash gift for a parent it sounds like they want to see 12 months history. What can we do?
Thanks
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Comments
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Who is asking and what have they said?
It is most unusual.
The last time we had a substantial cash deposit it was gifts from a wedding and the Lender was satisfied with our client banking the money and photographs of the day.
Who was the money built up by?
Does their income suggest this would have been possible.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, 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.0 -
Currently it's our mortgage advisor asking for this proof along with other documents. I've assumed on behalf of the bank.
Thier request was
"Confirm how you built up your purchase deposit or the source it has come from, this is required under UK money laundering rules. Please also forward a statement showing these funds in your name. If you are providing online bank statements to show these funds, these will ideally need to show your name, address, sort code, account number, and the HTTP or URL website address at the bottom of each page of the statement."
We went back and said that we were in the process of having the money transferred to us. Will this be an issue at this time? To which they said
"There is no need for these funds to be transferred, proof of where they are now will be required even if the funds are transferred to you. It’s the source and where the funds have been for the last 12 months, therefore if the funds have only just been credited to your Parents account proof would be required of who/where the funds came from to be credited into their account. Most lenders would even accept the Parents transferring direct to solicitors on purchase completion."
The money was built up by my partners mother. A couple of hundred pounds here and there over the past 10-15 years. In recent years she has started her own company and is now worried that putting it into her account may look like tax she's dodging the tax man and will have to pay tax on it a second time. Hence she was just looking to hand it over.0 -
It would do no harm to bank the cash now (at least get some sort of interest on it!), so you (or MiL) may as well do that.
Where did the cash come from? e.g. if from a business does she have accounts at least showing she had a legitimate source for it, if an employee does she have records of salary and that she was paid in cash.0 -
It's always been the case that cash withdrawals were made on payday. Whatever was left at the end of the month went in the safe.
I am sure she has accounts etc showing that she's been earning. Would proving that she's been employed be enough to justify such a large amount accumulated over such a long period?
We could of course consult our mortgage advisor on this. However we do understand how it may look. It's been hard enough to gain a mortgage (as I have gone self employed within the last 12 months). We're just concerned they may not advise and just back out.0 -
You may even have problems banking the cash. You will also need to convince the solicitor dealing with the purchase of where the cash has come from.0
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It's always been the case that cash withdrawals were made on payday. Whatever was left at the end of the month went in the safe.
I am sure she has accounts etc showing that she's been earning. Would proving that she's been employed be enough to justify such a large amount accumulated over such a long period?
We could of course consult our mortgage advisor on this. However we do understand how it may look. It's been hard enough to gain a mortgage (as I have gone self employed within the last 12 months). We're just concerned they may not advise and just back out.
There are no hard and fast answers, it'll be up to your lender (and your solicitor). If she can show an income, and significant cash withdrawals, that at least makes it plausible. But someone might be concerned that there's no evidence linking the cash in the safe with the cash she withdrew.
If the money has been in a bank account for long enough (say a few months), that may at least be persuasive that it's really your (or MiL's) money, and hasn't just been passed to you from an unidentified third party. So banking it sooner rather than later may be helpful.0 -
However £30,000 of our deposit us currently in cash sitting in a safe at her mum's house, built up over many many years. (Why she never trusted a bank with it I don't know).
If that's the case some of the bank notes may be out of circulation and need exchanging.
Over 10 years that's £250 per month saved. :think:0
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