Gifted deposit Halifax mortgage

melissa1709

Hi everyone

My partner and I are buying a house and £6000 of our deposit is gifted.

The money is coming from my grandad and a letter is needed from Halifax from the person gifting the deposit to say they are happy to do so and it is non repayable and they have no interest in the property.

My grandad is very old school and doesn't want to get into the nitty gritty and write letters etc so we agreed for him to transfer the £6000 to my father and my father would write the letter and say the money is a gift from him.

Our concern is my dad needs to say in the letter the source of the deposit, can he say it was a gift from his father? My dad works in the stock markets and all his money is tied up in shares or he would have given it to us himself, he was going to say the source of the money was selling shares but wasn't sure this would be OK if they then want to look into it further. Will it be an issue for him to say the money came from his dad or will my grandad have to write the letter himself with him as the gifter?

Any advice is greatly appreciated

Thanks

Returntosender

Our lender-generated gifted deposit form only required a signature (we filled in the rest).... Surely he could manage a signature??

melissa1709

Hi thanks for your reply

Yeah we did think if we could write the letter and ask him just to sign it he would be more than happy with this. Think he is just concerned if they then request further proof bank statements etc he wouldn't like that so much, like I say, he's very old school.

Is it often they request further proof? Bank statements etc?

Ithaca

£6000 is not a lot of money* so your lender won't ask to see bank statements etc from your dad (or your granddad). As long as whoever ends up giving you the money is happy to put in writing that it's a gift with no strings (i.e. no claim on the property) you'll be fine. No one is going to go trawling through bank statements asking you to prove where £6000 came from.

From the lender's point of view all they really care about is that if you default on your mortgage they can sell the house without someone else popping up claiming to have a financial interest in the property (e.g. "I paid 10% deposit therefore I own 10% of the house and its equity"). Hence the letter confirming the money is a gift.

I've just found the letter my dad wrote when my parents gifted us some money for a deposit, it's literally two lines saying:

"We confirm that we are providing a cash contribution to the above proposed property purchase as a gift and understand that we will receive no share in the property on completion".

They also had to provide a notarised copy of their IDs (passports) for money laundering regulations, so it sounds like it might be easier for your dad to do this for you (assuming your granddad is likely to resist going to a local solicitor and getting his passport copied and notarised?). My parents' local solicitor did it for free in about 5 mins, but worse case it'll be £20 or so.

* I know for many people £6000 would be an awful lot of money, but in terms of most modern property sales it's not significant.

SuboJvR

It's not the lender you need to worry about. In our case, our lender was happy with just their template letter.

Your solicitor will be doing money laundering checks on the money and will want to see the source of it. Dropping into your dad's account a few weeks/months before it's needed may not satisfy them! It's more likely they will want bank statements from your grandfather. Not guaranteed, but this has been the advice offered to me, and indeed matches up with the documentation I have received from my solicitor.

As described above my dad also needed to get a solicitor certified copy of his passport.

I should add as well that my solicitor also wanted to see evidence of where our savings came from toward the house, not just for the deposit, but for other associated costs.

SeduLOUs

I was approved for a Halifax mortgage with a gifted deposit of £40,000 from Dad (borrowing £80k). Nobody has asked for any other information from Dad other than the basic Halifax template letter and I was due to exchange next week (I actually pulled out of the purchase yesterday but that's another story altogether).

davidmcn

You can expect the solicitor to want ID and bank statements. Passing money through dad is only likely to complicate matters.

SuboJvR

SeduLOUs wrote: »

I was approved for a Halifax mortgage with a gifted deposit of £40,000 from Dad (borrowing £80k). Nobody has asked for any other information from Dad other than the basic Halifax template letter and I was due to exchange next week (I actually pulled out of the purchase yesterday but that's another story altogether).

Did your solicitor not do any money laundering checks?

SeduLOUs

SuboJvR wrote: »

Did your solicitor not do any money laundering checks?

Apparently not?!

I'll be using someone different next time around anyway as it all seemed excessively slow and with very little communication for no particular reason.

melissa1709

Thank you so much everyone for your replies. I had read previous posts where people had said the lender wanted further proof of deposit, I suppose I didn't realise it would only be for higher amounts of gifted deposit they would do this for.

My mortgage advisor has said the same thing, aslong as the letter states that they won't have any interest in the property and it is not repayable then they don't really care where the money comes from (obviously unless it was money laundering).

I haven't quite got to that stage with my solicitors yet as we have just started the mortgage application but it's good to know they will need the person gifting the money to go in with their passport.

Thank you very much everyone for your help

Lunchbox

Our solicitor did require bank statements and passport from the family member who gifted us a deposit that was only £7000, in addition to the letter of gift for the mortgage provider.