Gifted Deposits- What are the effects?

QueenPrincess

Hi
Does a gifted deposit deposit affect obtaining a mortgage in terms of the amount that one can borrow (reducing it) and if it does is does the portion of deposit play a role eg 20% vs 100%. A friend had his application refused mainly because (according to his broker) of the gifted amount????
The lender in qs is Natwest BTW. :eek::huh::huh::huh::huh:

kingstreet

I've never seen that.

Lenders might have issues if affordability is tight and they can't see any commitment from the purchaser. Not a NatWest kind of issue in my experience.

They hate recent heavy overdraft use, poor current account conduct, internal markers on previous NatWest/RBS accounts.

What's the source of the gift?

QueenPrincess

Majority of his deposit is from him £25k with his dad only giving around £5k. I was surprised to as broker never indicated there would be am issue & Sip went fine albeit it expired by a month at time of application.

So as long as the lender has some deposit even if it's 10% & the rest gifted that would be ok? I'm looking to have some of my deposit gifted so am a bit anxious if this will affect the amount I can borrow and whether it matters if I am a contractor. My affordability is not an issue as my income more than covers my expenses?

Just realised on one of my none main accounts (hence why it fell by the way side) it has been in od for a while. I'm going to clear this right away should I still wait 3 months b4 applying so that it's not am issue? The account is not one where my income goes into and I would not need to provide statements for it otherwise as it is with another provider but potentially depending on who my ultate lender is it could come on the radar?

Thanks in advance!!!

kingstreet

Get some broker advice.

You have a number of different things you want to address and a decent independent broker will help to negate them as much as possible.

QueenPrincess

I digress. My main qs is understanding if there is a negative effect of having a gifted deposit with certain lenders?
Has anyone had any issues with it when it came to applying 4 a mortgage????

Thrugelmir

QueenPrincess wrote: »

I digress. My main qs is understanding if there is a negative effect of having a gifted deposit with certain lenders?

There's nothing inherently wrong in having a gifted deposit per se. As with any mortgage application the devil is in the detail. What else has the lender seen/detected that has spooked them. In such circumstances the default position is to decline. Lenders have no need to take unnecessary risk.

Lauralou79

We had a much larger gifted part to our deposit ( we paid just over 50% deposit in total )

Natwest had no issues at all. Just had to have a letter from the person gifting. There's probably more to this situation than that

AnotherJoe

Indeed. Anyone remember the post regards the person whose mortgage was declined after the relative that sent them the "gift" put "loan to x" as the reference in the bank transfer ? The lender may well have decided it isn't a gift.

csgohan4

AnotherJoe wrote: »

Indeed. Anyone remember the post regards the person whose mortgage was declined after the relative that sent them the "gift" put "loan to x" as the reference in the bank transfer ? The lender may well have decided it isn't a gift.

Don't forget the gifter not wanting to give the bank their own bank statements or signing a gift declaration

petermortgages

i have just had a mortgage accepted from Natwest, we had about 80% of our deposit gifted to use by my partners parents.

sal_III

I had like 95% of the deposit as gift on paper*, Nationwide (and Solicitor) didn't bat an eye, as long they had the signed letters/declarations and bank statements.

*It wasn't worth the effort to try and explain that the money were mine and my parents where in effect repaying them back, as there was little proof of me giving them the money in a the first place years ago, so just marked it as a gift.