Deposit

Jacknevill

Hi we are in the process of buying our first home. We have the deposit all ready to go. But now the solicitors are saying we can’t iuse the deposit as when we were saving we put our savings into our daughters savings as we can just slid the money back and forth as we please. They are saying that we cannot use this money now? Is this corrrect. What the hell do I do now after all this hard work saving up. Thank you

bris

They possibly believe you are borrowing money from your daughter.
You cant use borrowed money for a deposit.


You can normally get round this with the person who holds the funds signing a declaration that the money isn't a gift so will have no claim on it.


Speak to your solicitor about this affidavit to see if it is an option.

CarrieVS

Whose account is the money in currently?

Is your daughter an adult who manages her own money, or is she a child (or otherwise not able to look after her own money) for whom you are managing an account in her name?

If she's an adult she can certainly gift you the money back (though I doubt you could force her to if for any reason she didn't want to) and I can't imagine why you couldn't use it to buy a house - though your solicitors might know of something I don't, and I would expect they would treat it as a gifted deposit.

If she is a child it might be more complicated as to whether you can take back money that you gifted to her - I don't know the answer myself.

Jacknevill

My daughter is only 2. We simple put the money in there just so we didn’t spend it. I can’t see why this would be a problem. We can take the money out of the account any time. But they are saying we can’t use that money.

Jacknevill

The money is back in my account.

My daughter is only 2. We simple put the money in there just so we didn’t spend it. I can’t see why this would be a problem. We can take the money out of the account any time. But they are saying we can’t use that money.

Exodi

If your daughter is a child, I'd imagine the solicitor will dig their heels in as presumably you'd have been knowingly breaching your banks ToS to get a higher interest return. You'd also have needed to declare any interest earned over £100 as it's treated as yours and if it exceeds your personal savings allowance, will be taxed at your marginal rate so you may also be unknowingly committing tax evasion.

Very interesting position to be in.

Out of interest, what sum of deposit are we talking?

EDIT: oh dear, just seen she is a child... Best to ask your solicitor about the best way to proceed...

Jacknevill

The money wasn’t even in there that long maybe 4 months. Nothing to do with trying to gain more interest at all just simply put it in there so i didn’t spend it. It’s £15k

CarrieVS

Here's someone else in the same position - seems to suggest it's the mortgage lender that has a problem with it, and I don't find it entirely clear on whether it's a universal rule or just their lender.

Do you know whether your solicitors are objecting because they consider it not to be above board for anti-money-laundering etc, or whether they're passing on the mortgage lender's decision/rules?

If the latter, is it worth looking for other lenders who might allow it? If the former, could it be what Exodi said?

I think your next step is to ask the solicitors for clarification about the reason, and whether there's anything you can do to straighten the situation out.

Jacknevill

It’s not the lender we have the mortgage all ready to go and the solicitors have the contracts signed by the seller of the house we are buying. But then called me today to tell me this. Surely they would of said something at the beginning as they have had all my paper work

CarrieVS

Jacknevill wrote: »

It’s not the lender we have the mortgage all ready to go

Was the lender aware of the money coming from your daughter's account? Did you tell them it was your savings, or a gifted deposit?

Your solicitor is probably also acting for the lender, and will have a duty to tell them about any findings that they might be concerned about. The mortgage offer will usually have a clause to the effect that they can withdraw the offer if you have provided any information that's not true (which could include an honest misunderstanding) or if the solicitor tells them anything they're not happy with.

I know you only put it in her account for convenience but I believe that would technically be considered you gifting her the money, so that it was no longer legally yours even though you still had control of it. So now you are technically accepting a gift from someone who can't make that sort of decision for herself.

In any case, I strongly suggest you talk to your solicitors and ask the reason. They are a better source of advice than people on the internet.

Jacknevill177

Yea they had all the correct paper work. And nothing got said to us. I can’t belive this is a problem.