Gifted Deposit - Close Friends

Bugalugs

Myself and partner could be in a position to buy but only thanks to an £11K gift from a very close friend. Neither of us have parents who would be able to assist like this. We do also have approx £4K in a couple of HTB ISA, and also have a further 6 months worth of saving where we think we could save up a further £4-5K.

I’ve now had a look online - firstly at the ‘Which’ site which seems to indicate that a gift of money from friends is frowned upon and may stop us getting a mortgage. Does anyone have an experience similar to this, or that could advise?

Verix

It's certainly unusual and plenty of lenders won't accept it, however there are lenders who can allow this as a source of deposit.

Bugalugs

Verix wrote: »

It's certainly unusual and plenty of lenders won't accept it, however there are lenders who can allow this as a source of deposit.

Thank you, we are going to be living with friends for the next 6 months or so, to allow a final ‘push’ on saving - and recognise that we’re very fortunate in this respect too. Bearing in mind there will be a bank account with the money in, plus our savings, how does the mortgage provider ‘see’ where it came from?

Sea_Shell

Is this truly truly a gift, without a single string attached, or implied?

I'd be very wary as there's very rarely a "free lunch" in life.

I wouldn't want to feel indebted to my best friend, even if they swore blind it was a gift.

Call me and old synic, but...

Bugalugs

Verix wrote: »

It's certainly unusual and plenty of lenders won't accept it, however there are lenders who can allow this as a source of deposit.

Sea_Shell wrote: »

Is this truly truly a gift, without a single string attached, or implied?

I'd be very wary as there's very rarely a "free lunch" in life.

I wouldn't want to feel indebted to my best friend, even if they swore blind it was a gift.

Call me and old synic, but...

Totally understand your cynicism, but this is someone that’s like family and is just in a much better financial situation than us.

Verix

Bugalugs wrote: »

Bearing in mind there will be a bank account with the money in, plus our savings, how does the mortgage provider ‘see’ where it came from?

A mortgage adviser would ask for evidence of the deposit funds, You would provide your bank statement with £11,000 deposited in to it, they would then ask for evidence of where that money came from, which would likely mean getting a copy of your friends bank statement. They would be required to sign at least one letter confirming the money is a gift and not a loan, and that they would have no rights to the property at all.

Solicitors will also want to satisfy themselves that the source of deposit is acceptable.

Good luck with it.

ACG

As verix said, it can be done but your choice of lenders will be limited, but should be normal rates.

Bugalugs

Thanks so much for the advice everyone!