Gifted Deposits - when do you need them by?

piggy_bank

Hi Everyone,

My OH and I have had an offer accepted on a house (yay!)

We have an agreement in principle in place, but our broker has said that we would be much better with a 10% deposit. We are a few thousand short as we had about 8% saved, and had expected to get a 95% mortgage.

My Mother has very kindly offered to give me the remaining money (apparently she's had it stashed away as a wedding present for years), and it means that my OH and I will be contributing equal shares, which is great.

Her money is saved in premium bonds, so it takes a few weeks to withdraw. My question is - at what point do we need to have this money in our account? She doesn't want to withdraw it before it's needed incase the bonds win, which is fair enough. We're needing to show bank statements as proof of deposit, so will I need to show statements from my mother as well? I have a signed letter confirming the gifted deposit, will that be enough? I don't know if you can even get a "bank statement" from Premium Bonds.


If anyone has been through something similar and has advice to share that would be great. :beer:

Housebuy12345

When you apply for the mortgage

AnotherJoe

I disagree. You need the money upon exchange.

HampshireH

You need the money on exchange but your solicitor will want evidence of this before then.

She will need to evidence where the money she is gifting has come from.

How far back they go seems to depend case by case. I know someone who needed little evidence (just current account statements) and another whose dad was asked to evidence savings accrued over 5 + years including inheritance and pension statements as part was received as a lump sum.

piggy_bank

Thanks, is it normal for the estate agent to need to see proof of this as well? The Vendors are using HouseSimple (I'm guessing because they're doing a promo with no selling fees for Yorkshire) and they seem to want an awful lot of documents from us before they will take the property off the market.

Comms69

piggy_bank wrote: »

Thanks, is it normal for the estate agent to need to see proof of this as well? The Vendors are using HouseSimple (I'm guessing because they're doing a promo with no selling fees for Yorkshire) and they seem to want an awful lot of documents from us before they will take the property off the market.

There is no hard and fast rule.


You have no relationship with the estate agents, so I wouldn't show them anything. But that may mean that the sale doesn't progress

eddddy

piggy_bank wrote: »

Thanks, is it normal for the estate agent to need to see proof of this as well? The Vendors are using HouseSimple (I'm guessing because they're doing a promo with no selling fees for Yorkshire) and they seem to want an awful lot of documents from us before they will take the property off the market.

A good EA will want to make sure that a buyer is credible - i.e. they really do have funds for the deposit, and have a mortgage in principle.

The EA mainly wants to make sure that you're not a 'dreamer' or time waster.

In my experience, EAs are not finance / investment experts. So if you show them a bunch of documents (like premium bond certificates etc) and confidently explain that they prove you have the funds in place - the EA will probably just nod their head, and say "Yes, that's fine".

eddddy

... and in answer to the question of when you need the gifted deposit by...

Typically:

• you have to pay 10% of the purchase price when you exchange contracts

• then you have to pay the remaining 90% of the purchase price on completion

So based on what you say, it sounds like you'll need the gifted money before you exchange contracts (in order to reach 10% of the purchase price).


In fact, it's better to have the gifted money in your account, or your solicitor's account, before you exchange contracts in all circumstances - otherwise the donor might change their mind about the gift after you've exchanged contracts (or the donor might get run over by a bus!).

kingstreet

I want "it" (evidence = bank statement, gifted deposit letter/form and donor statement) before we submit the application; or I want a good reason to run by the lender to ensure it is happy with the plans.

gettingtheresometime

Premium bonds can be cashed in & the proceeds received relatively quickly - think its days rather than weeks.

The only delay may be if you decide to process the encashment after the next draw which may be weeks away