Proof of Deposit for solicitors

scullydion

How far back do you have to provide statements with proof of deposit for solicitors?

Thrugelmir

What's your potential issue?

scullydion

My dad is loaning me the money for our deposit. At the time of applying for the mortgage we had told the mortgage advisor about it and they thought it’s not a problem.

We had the mortgage offered and were about to sign the final paperwork for the house we were buying until the solicitor rang us with some bad news. The bank had retracted the mortgage offer due to affordability. The bank now thinks we can’t afford repayment because we’re also going to be repaying my dad.

We’ve had the deposit sat in our savings account for around 3 months now. We don’t think there is any way around this predicament and now think that we’ll have to wait another six months before being able to apply for another mortgage.

If the deposit has been in our savings account for over 6 months will we still have to declare that my dad is lending me the money? Or do solicitors check back further than that? If that’s the case then we’ll have to aim for a lower mortgage to meet affordability.

Thanks in advance for any advice

AnotherJoe

What are the terms of the loan? Is it indefinite? Or is it to be paid back over a period of time?

If the former that's acceptable to some lenders with the right loan agreement. The latter, its a no-no.

scullydion

We’ve agreed to start making repayments once we have bought a house and it would be an interest free loan loan to be repaid over 15 years.

davidmcn

There's no standard period. Some will only look back 3 months, others longer.

bertiewhite

As above - it depends on the situation I guess but I had to provide 3 months of bank statements for my mortgage lender and only the completion statement & specific bank statement entry of the proceeds of my last house sale for the solicitor/estate agent

butterflybook

usually its 3 months however they will still want to know the source of a lump sum deposit in all liklehood. Lenders generally accept Gifted deposits from family but when it is a loan then they do not tend to like it

Neutrinno

scullydion wrote: »

If the deposit has been in our savings account for over 6 months will we still have to declare that my dad is lending me the money? Or do solicitors check back further than that? If that’s the case then we’ll have to aim for a lower mortgage to meet affordability.

Of course you would, just because it's been in your bank account for a period of time doesn't change the fact that your deposit is a loan. How far solicitors will check may very, but it still doesn't mean that it doesn't need to be declared. Your mortgage adviser should of ensured this wouldn't of been an affordability issue with the lender before applying.

In reality you'll either have to seek other lenders where you may pass their affordability checks or take a lower mortgage out if gift isn't feasible.

Mortgage_Adviser

Did you do it via the broker ot you are referring to the bank;s internal advisor?
Who is the lender?

cherryblossomzel

I had to go back 6 months with the solicitor, 3 months with the broker