Help with issues buying first property

Ara1985

I have just had my third offer accepted on a property.

I didn’t have a mortgage agreement in place as I wasn’t expecting to find somewhere so soon and my mortgage advisor was working on it.

First of all the EA said they wouldn’t accept the offer until I spoke to their mortgage broker.
I said they could speak to my MB who would confirm I was ready to go ahead with the mortgage application. After lots of back and fourth, of course their people didn’t speak to my people after they realised I wouldn’t be using their broker.

They have now accepted the offer but won’t take the property off the market until I show proof of funds. They are asking for proof of £30K deposit in the form of a bank statement. The offer is £258,000 and I will be paying 10% deposit according to the mortgage my MB has found me, why are they asking for proof of £30k?

I have £20k in savings from income and my parents have given me £6k to cover the initial deposit for now which is already in my account. I will eventually be paying them back but there is no time limit on this.

Will I need to provide a gift deposit letter from my parents confirming they gave me the funds? I don’t want to say it was a loan as it may affect my outgoings on the mortgage application.

I am getting afraid that I may loose the property, can anyone please advise how I should proceed with these issues both handling the EA and proof of funds.

Updates:
Exact wording from Estate agent regarding deposit 'Your most recent bank statement showing your £30,000 deposit you are putting down against your mortgage'

I am aware of all fees and stamp duty and I am able to pay these.

I have no desire to hide the funds from my parents but I just want to know if it should be declared as a gift or a loan since I will be paying them back-In a lump sum which I will be receiving rather than monthly or regular payment.

marliepanda

Well you are committing mortgage fraud by saying a loan is a gift, but I imagine a lot of people are also committing this fraud.

They want to know you are proceedable. You say you have 30k despoit then described 26k of savings... plus theres nothing in that for fees and stamp duty?

glosoli

Your solicitor will be doing their investigations as to where the deposit is coming from, and seek evidence of this, so it is going to come to light the fact it is a gift. The solicitor is then going to fax your lender asking if they are okay with this, and then your application with the lender will be brought to an abrupt halt when they realise you haven't been telling the truth. It isn't easy to game the system you know.

da_rule

You will need to prove to your solicitor where the funds have come from. Your parents will have to produce relevant bank statements too. They will have to sign a gifted deposit declaration. If you make an unofficial commitment to repay then that's between you, but they cannot enforce it.

You also need to tell your broker that part of the deposit is a gift so that they can make sure that they partner you with a lender who is accepting of this.

As has been said, they probably want to see £30k as that allows the extra for stamp duty, legal fees and moving fees.

Ara1985

glosoli wrote: »

Your solicitor will be doing their investigations as to where the deposit is coming from, and seek evidence of this, so it is going to come to light the fact it is a gift. The solicitor is then going to fax your lender asking if they are okay with this, and then your application with the lender will be brought to an abrupt halt when they realise you haven't been telling the truth. It isn't easy to game the system you know.

I think you have misunderstood what I said, I didn't realise I was trying to 'game' anyone.

At this stage it is indeed a gift and I have no qualms in telling anyone, solicitors or otherwise where it came from and my parents have proof of sale of their home to show where the money came from in the first place.

Point is I will pay them back as I have a sum of money coming with which I can pay them back but I don't want it to be termed as a loan whereby I will be paying them ex amount a month from my incomings.

Ara1985

marliepanda wrote: »

Well you are committing mortgage fraud by saying a loan is a gift, but I imagine a lot of people are also committing this fraud.

They want to know you are proceedable. You say you have 30k despoit then described 26k of savings... plus theres nothing in that for fees and stamp duty?

Please re-read my original post.

I have money for all fees as well as deposit.

marliepanda

Ara1985 wrote: »

Please re-read my original post.

I have money for all fees as well as deposit.

I do not need to reread. Perhaps you need to rephrase things if you misspoke.

You say 'I have a 10% deposit' Then you say you have 20k savings and 6k from Mum and Dad. Those sums don't work.

You also say 'I dont want to say it is a loan.' Why would you say that, if it wasn't a loan. I don't say things are things, that they are not...

da_rule

Ara1985 wrote: »

Please re-read my original post.

I have money for all fees as well as deposit.

Where in your original post does it say this?

It says you have £20K in savings and £6k from parents (£26k total). A 10% deposit is £25,800, so you have £200 more than you need. This won't cover fees and stamp duty.

Ara1985

da_rule wrote: »

You will need to prove to your solicitor where the funds have come from. Your parents will have to produce relevant bank statements too. They will have to sign a gifted deposit declaration. If you make an unofficial commitment to repay then that's between you, but they cannot enforce it.

You also need to tell your broker that part of the deposit is a gift so that they can make sure that they partner you with a lender who is accepting of this.

As has been said, they probably want to see £30k as that allows the extra for stamp duty, legal fees and moving fees.

My parents will be willing to show all of this, I am using the same solicitor they used for the sale of their house which is where the funds have come from.

This has all only happened today so I will be making contacting with solicitor tomorrow.

Ara1985

da_rule wrote: »

Where in your original post does it say this?

It says you have £20K in savings and £6k from parents (£26k total). A 10% deposit is £25,800, so you have £200 more than you need. This won't cover fees and stamp duty.

You said that I said I have 30k which isn't what I said, This is what the Estate agents are asking for!

I didn't mention anything about fees in my original post and I am quite aware that £200 doesn't cover it.

RedHitman

Yes the solicitor and bank will ask for a letter from your parents confirming the money is a gift and that they hold no equity in the house.
If and when you pay them back is your call, but legally your parents will have signed a statement saying you don't owe them a penny.
This is what I had to do. Although my money actually WAS a gift.

As others have said, your sums don't sound right, so no wonder the estate agents, mortgage brokers etc are asking for proof of funds first.