Proving funds

nettie1xoxo

When we go on the market in a month or so, our new home will be partially funded from the proceeds of our current house and the remainder from my husbands pension lump sum, which will be invested.

We have been in our current house for decades, so are well out of the loop for standard practice nowadays.

How do we prove that we can afford the house? Does it need to be pulled out of the investment and put in a bank before we can have an offer accepted? How much information are we obliged to give the EA?

SmashedAvacado

You are not obliged to give them anything. What you need to do though is give them enough to give the seller confidence that you are a proceed-able buyer. So they might want to know about your sale and how committed that is, and also where the funds are coming from. Proving full funds might be relevant at the point of accepting your offer - but that can be done via your lawyer if you feel more comfortable - and that doesnt have to be the lump sum withdrawn that could be confirmation that you have the funds and intend to withdraw.

YoungBlueEyes

This isn't exactly the same but similar I think.

I've had an offer accepted on a house recently, the EA wanted to see proof of funds. Half is coming from the sale of our current house, and the rest from savings I've had in premium bonds for years. So I took our title deed and most recent share certificate as proof. They were fine

Flugelhorn

Thanks so starting this thread - I was wondering how this worked, last house we bought was cash + mortgage and they didn't need any evidence of either when put in an offer. 10 years on and it seems things have changed - aiming to get money into one savings account, (NS&I) and show that if needed

Slinky

Flugelhorn wrote: »

Thanks so starting this thread - I was wondering how this worked, last house we bought was cash + mortgage and they didn't need any evidence of either when put in an offer. 10 years on and it seems things have changed - aiming to get money into one savings account, (NS&I) and show that if needed

Be prepared that your solicitors will want bank statements going back (probably) 6 months and that you'll need to account for every receipt of £1000 or over. We had to do this; my OH regularly moved money around chasing better rates, the money trail I had to account for was long and tedious.

SmashedAvacado

Slinky wrote: »

Be prepared that your solicitors will want bank statements going back (probably) 6 months and that you'll need to account for every receipt of £1000 or over. We had to do this; my OH regularly moved money around chasing better rates, the money trail I had to account for was long and tedious.

That would be highly unusual for solicitors to want or need this. In fact they won't. It is something a lender might want. A solicitor might want a bank statement to confirm your ID as part of their KYC check and they might want you to tell them your source of funds, but that doesnt involve anything like this.

davidmcn

SmashedAvacado wrote: »

That would be highly unusual for solicitors to want or need this. In fact they won't. It is something a lender might want. A solicitor might want a bank statement to confirm your ID as part of their KYC check and they might want you to tell them your source of funds, but that doesnt involve anything like this.

The solicitors will also need to verify the source of funds in order to comply with anti-money-laundering regulations, which generally involves providing bank statements.

SmashedAvacado

It involves providing one bank statement less than 3 months old
and one other proof of address
forensic DD of bank statements is rarely required unless your circumstances are suspicous

davidmcn

SmashedAvacado wrote: »

It involves providing one bank statement less than 3 months old
and one other proof of address
forensic DD of bank statements is rarely required unless your circumstances are suspicous

They're required quite frequently judging from other threads here - even if the solicitor takes a laid-back approach to the AML regulations, if they're acting for a mortgage lender they also need to check the source of funds to verify that the deposit is actually coming from the borrower.

Slinky

Slinky wrote: »

Be prepared that your solicitors will want bank statements going back (probably) 6 months and that you'll need to account for every receipt of £1000 or over. We had to do this; my OH regularly moved money around chasing better rates, the money trail I had to account for was long and tedious.

SmashedAvacado wrote: »

That would be highly unusual for solicitors to want or need this. In fact they won't. It is something a lender might want. A solicitor might want a bank statement to confirm your ID as part of their KYC check and they might want you to tell them your source of funds, but that doesnt involve anything like this.

Well that's exactly what I was asked to provide to our solicitors when we bought a property last year.

It comes down to their view of Money Laundering Regulations.

JoJo1978

We started house hunting before we sold last year due to logistics, we were relocating across the country. Vendors were satisfied we were serious just on the basis of seeing our asking price and selling location on Rightmove.

The house we eventually went for exceeded our asking price by some considerable margin but we had accepted an offer on ours by then. We sent our memo of sale and a screen shot of our investment portfolio balance with details apart from the total redacted to our solicitor to pass on, that was fine. Ultimately we didn't use that account as funds but it was the simplest way to show we were good for the balance.

We still had to show bank statements earlier on in the solicitors process, but that was for AML checks as other people have said. Good luck with the process!