Mortgage Application - a few questions...

TheBanker

Hi,

I am starting the process of applying for a mortgage to buy my first property. I've been in touch with a local Independent Mortgage Advisor and he's going to give me a call next week after the holidays. But I've started getting documents together and I have a question - would appreciate any help.

In 2015 my dad passed away. He didn't leave a will so everything went to my mum. When my dad was taken ill, he had tried to arrange a solicitors appointment to write a will (I did not know about this until after he died), but it wasn't done in time. He had verbally told my mum that he wanted to leave some money to me and my sister, and smaller amounts to other relatives.

Mum decided to fulfil Dad's wishes by making a gift to me (and the other people dad had said he wanted to "look after"). Mum refers to this as my inheritance, but strictly it was her inheritance which she gifted to me.

When I received the money, I used some to pay off a loan, and put the balance in a savings account. Since then I've added more funds each month from my salary. The money has also been moved several times between accounts to obtain the best rates available.

Question: Is a lender likely to need proof that the original funds were a gift, or won't they look back that far given I've had the money for over 12 months?

If they are likely to need proof that it was a gift, is a simple letter from mum sufficient? Might they ask for proof of where mum received the money from?

I'd like to sort this out ASAP - all of dad's paperwork is at mum's house (200 miles away) and I would want to collect whatever is needed next weekend when I go to visit. I don't want to be in a position where I have to ask mum to go through the paperwork on her own to find something I need, as this will cause unnecessary distress to her.

Many thanks for your help.

MoneySavingSue

I was just asked for 3 months bank statement and they could see funds added during this time but didn't ask for any further proof.

davidmcn

Should be regarded simply as your savings if you've had it that long (I would only look back 3 months) . Depending how long they look back, you may need paper trail showing it being shuffled between your accounts.

ACG

The lender may want evidence of deposit, that will vary from lender to lender.

Some may just want a statement or 2, others will want to see the gift/inheritance going in. In any case, this is not something you need to worry about, I would expect your broker to be able to overcome this and sort it all out for you. Explain it to the broker and you will be fine.

Spikecast

Wouldn't worry, worst case is your mum writes a letter stating it was a gift. We very kindly got a small amount towards our new house off a family member and they just needed a signed document from him saying it was gift and that he didn't want it paying back.

davidmcn

Spikecast wrote: »

Wouldn't worry, worst case is your mum writes a letter stating it was a gift. We very kindly got a small amount towards our new house off a family member and they just needed a signed document from him saying it was gift and that he didn't want it paying back.

If they go back far enough to want a gift letter they're likely also to need ID and bank statements from the donor. But as above, they're unlikely to look that far back.