Can I use part cash payment towards deposit?

missvp

I have had my mortgage offer through today, which is 4k short of what I need to borrow.

My dad is already gifting me some money towards deposit and has provided appropriate paperwork and statements etc.

He has offered to gift me the additional 4k towards the deposit. However this is from cash savings he has at home and has saved up over many years.

With money laundering and everything else, would this be seen as acceptable towards the deposit, and how would I go about it? I'm not sure what else I can do at this point

marksoton

What has your broker said?

SmlSave

With money laundering your solicitor will most likely accept the funds from your bank account only, so you'd therefore bank the money into your own account first. Do call your solicitor Monday and ask.

If you turn up with actual cash alarm bells will fly and if you read your solicitor terms and conditions it probably states the maximum amount of cash they can accept. £200 for example.

If your Dad banks the money and transfers it then he'd have to give his evidence of identification to your solicitor.

Do call/email them to check.

missvp

Oh of course the money can be transferred into a bank account first! But I wasn't sure if they would question the sudden injection of cash even if it was declared?

Dad has already provided necessary ID for the gift before hand.

I will check with solictors and lender on Monday, but does anyone else have experience? The lender is nationwide.

SmlSave

Nationwide are a nice bank to deal with, as they know it's a gift I doubt they care how your solicitor gets the funds.

The deposit gets paid before exchange to your solicitor then all other fees get paid to your solicitor before completion.

The lender (nationwide) trusts your solicitor to do all the necessary checks (after the mortgage offer has been issued) which doesn't include checking your account.

davidmcn

SmlSave wrote: »

The lender (nationwide) trusts your solicitor to do all the necessary checks (after the mortgage offer has been issued) which doesn't include checking your account.

It will include the solicitor checking the source of funds which have been recently paid into the account. If a chunk of it came from a large cash deposit then I would expect them to have concerns.

In short you need to ask your solicitor what they think. It's very difficult to comply with money laundering regulations if a client has produced a wodge of cash.

missvp

I perhaps didn't explain my first post clear. Apologies!!

The money (4k) can be paid into a bank account and the processed with the rest of the deposit, but the money will come from cash funds ie savings sitting at home and paid into a bank account.

I know solicitors are happy to accept some amounts appearing into bank accounts if they can be explained, but as it's 4k I wasn't sure that they would accept it.

So is it the solicitors, or the lenders who have to agree that the cash paid into an account would be ok? And from your responses I would assume it's at the discretion of my solicitor/lender?

It is all legitimate savings but I realise that can't be shown as there's no trail like with bank accounts etc.

Nobbie1967

If your dad banks the cash and then transfers it electronically to your account with the other money already in his account. How is the solicitor going to know it was originally a cash deposit? The bank may ask your dad where the cash came from, but that's separate to any duties the solicitor would have regarding money laundering.

davidmcn

Nobbie1967 wrote: »

If your dad banks the cash and then transfers it electronically to your account with the other money already in his account. How is the solicitor going to know it was originally a cash deposit?

Because they'll follow the trail back and see the cash deposit on his bank statement.

davidmcn

missvp wrote: »

So is it the solicitors, or the lenders who have to agree that the cash paid into an account would be ok?

Both, really. The solicitor needs to comply with anti-money laundering regulations to identify the source of any funds passing through their hands, and the lender needs to know who has paid the deposit (though that should be answered by the first question).

At most your solicitor will be able to say that your dad paid some cash into his (or your) bank account, not whose cash it actually was.

missvp

davidmcn wrote: »

Both, really. The solicitor needs to comply with anti-money laundering regulations to identify the source of any funds passing through their hands, and the lender needs to know who has paid the deposit (though that should be answered by the first question).

At most your solicitor will be able to say that your dad paid some cash into his (or your) bank account, not whose cash it actually was.

Exactly. I'm aware they will trace any transfers back to the relevant bank accounts and can request bank statements (they've already had my dad's relating to the gift he's so far given).

And I would assume that as they cannot tell whose cash it actually was our the source of it (regardless of it it IS from cash savings), it may be hard for them to comply, not least because it isn't a small amount or few hundred.

I guess alli can do is speak to my broker who are dealing with the mortgage and lender, and then speak to the solicitors myself first thing Monday.

I'm not sure what else I can do if they say no it won't be acceptable