Stages of buying a house - when is proof of deposit needed?

Eyeonthesky

Hi, I'm a first time buyer and I'm very lucky to be gifted a large deposit from my family. This deposit cannot be withdrawn and transferred to me until the beginning of April, but I want to know at what stage in the house buying process do I actually need the money, or at least proof that I have/will have it.

I've started looking at houses but I'm not sure when I can start making offers. Given that it could take, say, 8-10 weeks to complete, does that mean I could potentially make an offer in February? I guess I just need to know at what stage I would need proof of deposit and how long it usually takes to get to that stage. By proof I mean does it need to be in my account or can i submit proof of it being elsewhere under someone else's name with a signed form to say it will be a gift.

Any advice appreciated, thanks

HouseBuyer77

It really depends upon the EA and the vendor. Legally all you need to do is have the money transfered at the appropriate time (10% of purchase price on exchange of contracts + the rest at completion) and provide information on where the deposit has come from.

In addition the EA or vendor may ask to see some proof of funds so they're happy the sale will actually happen. This may mean they want a bank statement the day they accept your offer. They might not ask for anything at all.

If whoever is giving you the money is happy to supply a bank statement and a signed letter that they will be giving you the money I would think that would suffice. If they're uncomfortable with showing a statement to an EA instead they could show it to your solicitor who would then write a letter to the EA confirming they have seen proof of funds.

DaftyDuck

Under circumstances like these, explain all in detail to your own solicitor, and to nobody else. Instruct your solicitor to confirm funding to the estate agent. Never give the estate agent information like this if you can help it.

Eyeonthesky

Thanks, should I approach a solicitor now in preparation for making offers or do I wait until I've made an offer?

Eyeonthesky

Thanks, would my mortgage provider want to see proof? If so what stage would this be?

kinger101

Will a solicitor be prepared to confirm the vendor has the deposit just because they say they have?

stator

Santander want proof of deposit before they instruct the valuation.
Post Office/Bank of Ireland didn't want proof of deposit at all.

Solicitors will want proof of deposit before you exchange.

Sometimes the vendor will want proof of funds before they accept your offer.

stator

Eyeonthesky wrote: »

Thanks, should I approach a solicitor now in preparation for making offers or do I wait until I've made an offer?

Get quotes and pick a solicitor but you don't instruct them until you've had an offer accepted.

kinger101

Eyeonthesky wrote: »

Thanks, would my mortgage provider want to see proof? If so what stage would this be?

Yes, but you don't need this for a decision in principle. You'll need it for a full application. If you had a offer accepted in say January, and you'd not had the mortgage approved at the end of March, there is a very good chance the vendor will stick their property back on the market. Unless you've been frank with them from the start. If it were my house, I'd tell you to come back with a offer in April.

HouseBuyer77

Thanks, should I approach a solicitor now in preparation for making offers or do I wait until I've made an offer?

Having a solicitor lined up can be useful as it shows you're keen and prepared, however there's not much they can do until you've got an offer on somewhere (indeed they may advise you to just call them once you have an offer in).

Thanks, would my mortgage provider want to see proof? If so what stage would this be?

I don't think mine did. Fundamentally if you don't produce the deposit it's not a problem for them. You'll have paid them for the application and valuation. If you can't actually take up the mortgage due to a lack of deposit they won't loose out.

One thing to be careful of when choosing lender/solicitor is your solicitor will need to be on your lender's solicitor panel. The lender should be able to tell you if a specific solicitor is on their panel.

Eyeonthesky

kinger101 wrote: »

Yes, but you don't need this for a decision in principle. You'll need it for a full application. If you had a offer accepted in say January, and you'd not had the mortgage approved at the end of March, there is a very good chance the vendor will stick their property back on the market. Unless you've been frank with them from the start. If it were my house, I'd tell you to come back with a offer in April.

So could I supply the proof of funds in someone else's account and a letter to say it will be gifted to me, and pass this onto my mortgage lender as proof of deposit for mortgage application? Therefore proceeding with application before April