Avoiding gifted deposit fees from conveyancers

Dave360180

Does anyone have any tips on doing this please ?

Some charges can be not insignificant. Typically these could be £75 fee plus £200 insolvency indemnity on some cases where it's paid directly to the solicitor on completion plus additional ID checks at £15 a go. There can also be hassle if they need to explain the source of the funds for anti money laundering requirements.

Perhaps lets focus on conveyancing rather than mortgage lender requirements, assuming a mortgage lender is already aware of the gifted deposits and have satisfied all their requirements.

What work is involved? My conveyancer refers to additional administrayion and needing to report the gift to the mortgage lender. Does this cover preparing the letter from the person stating it's a gift, as most people can just do that themselves easily enough. Presumably ID checks too. Any thoughts on whether the requirement to report to mortgage lender is needed where the gift is paid directly to you - rather than to solicitor on completion ? Or is it needed if a mortgage offer has already been received ?

Do you typically have to pay twice if you have TWO gifted deposits e.g. one from each parent/s of a couple.

As above, does it make a difference if the deposit is paid by donor directly to the solicitor or to you ? Some of the language from my coveyancer pack refers to people that "are giving" you the gift - not that have given you the gift which is not the same thing.

I suppose you could try ensure the gifts are received fully 6 months ahead of time but not always practicable to do six months ahead of time.

I hope the above makes sense. Any other tips please say.

davidmcn

daveandgem wrote: »

What work is involved?

Checking the donors' IDs, checking source of funds, reporting to the lender that there's a gifted deposit (and getting a response out of them).

My conveyancer refers to additional administrayion and needing to report the gift to the mortgage lender. Does this cover preparing the letter from the person stating it's a gift, as most people can just do that themselves easily enough.

If you like, but the solicitor will still need to check it's correctly worded and isn't going to discount a fixed surcharge any.

Any thoughts on whether the requirement to report to mortgage lender is needed where the gift is paid directly to you - rather than to solicitor on completion ?

Yes,the lender needs to know who the deposit has actually come from.

Or is it needed if a mortgage offer has already been received ?

Yes (given that lenders typically don't bother mentioning anything about it in the mortgage offer even if they're already aware).

Do you typically have to pay twice if you have TWO gifted deposits e.g. one from each parent/s of a couple.

Don't see why not if it's extra work.

As above, does it make a difference if the deposit is paid by donor directly to the solicitor or to you ?

Not in the slightest.

MystArch89

daveandgem wrote: »

As above, does it make a difference if the deposit is paid by donor directly to the solicitor or to you ? Some of the language from my coveyancer pack refers to people that "are giving" you the gift - not that have given you the gift which is not the same thing.

I might be mistaken so someone else might correct me on this.

But i am in the process of buying myself, and on my side of things, its stated that if the monies were to be sent straight to the solicitors from the donors, there's more works/ID checks etc to be done and will be charged. However if the monies came from you direct to the solicitors, there's less work = less charges as they would deem that the checks have been done by the bank when the monies came from the donor.

davidmcn

MystArch89 wrote: »

I might be mistaken so someone else might correct me on this.

But i am in the process of buying myself, and on my side of things, its stated that if the monies were to be sent straight to the solicitors from the donors, there's more works/ID checks etc to be done and will be charged. However if the monies came from you direct to the solicitors, there's less work = less charges as they would deem that the checks have been done by the bank when the monies came from the donor.

Not sure that provides any comfort or saves any work - the solicitor still needs to show that they've identified the ultimate source of the funds.

Dave360180

OK thank you both - it sounds as if the charges are unavoidable from what you're saying.

AnotherJoe

I think the only way of avoiding is to receive them far enough in advance that they dont show on the bank statements. I dont know how far back a gifted sum needs to be declared it would likely depend on the wording.

foxy-stoat

daveandgem wrote: »

OK thank you both - it sounds as if the charges are unavoidable from what you're saying.

I wouldnt worry about the fees, your getting a free deposit for your home which I assume is a 4 or 5 figure sum of money so a few hundred pounds in fees is small compared to the amount you havent had to pay.

davidmcn

AnotherJoe wrote: »

I think the only way of avoiding is to receive them far enough in advance that they dont show on the bank statements. I dont know how far back a gifted sum needs to be declared it would likely depend on the wording.

It depends on how far back the solicitor wants to look. Which varies. Typically might be the last 3 months bank statements, but from other threads here it is sometimes longer.

bouicca21

Have things been tightened up? I think it was only 3 years ago that I gifted some money towards a deposit - paid it into DD's bank account, went through money laundering ID checks with solicitor, and signed a declaration that I would have no financial interest in the property to be bought. I don't think this incurred an extra fee.

kingstreet

As with anything;-

HTB
acting for mortgage lender
SDLT return
leasehold
gifted deposit

check the conveyancer's charges before you make a commitment.

Throwaway1

foxy-stoat wrote: »

I wouldnt worry about the fees, your getting a free deposit for your home which I assume is a 4 or 5 figure sum of money so a few hundred pounds in fees is small compared to the amount you havent had to pay.

I'd agree with this, I know we all like to save money but I just take the view of if the solicitor has to do the work, then I have to pay for it. When it's in this particular situation too, where it's around an £100 payment to receive what is presumably thousands pounds worth of money, then I wouldn't be complaining too loudly.