When does solicitor requests source of deposit?

MaddyJohn

We have an offer accepted and we have around 9% deposit because of which we classified for 5% LTV. Most of the agreement in principle came back saying they can lend us. However because of our visa type which only got checked during application stage, they said we are not qualified for 5% LTV.

Post that we spoke to our solicitor and MB and he said until we do exchange of contracts , they wont be requesting proof of deposits which probably is around 8weeks from now. So we can save by end of Aug the 10% deposit.

But we just want to be sure that this is not going to cause an issue down the line?

davidmcn

Well, it sounds like they've already told you it won't be a problem. The solicitors don't care how long it takes you to get the deposit together, just as long as you have it whenever they need it. They'll just check the source of funds etc whenever you send it to them.

MaddyJohn

Thanks appreciate quick response. The only other thing is that we also informed him that for legal and other costs we have got some support from a friend. And this reflects in my bank statement. Will this cause any issue with Lender or Solicitor down the line?

[Deleted User]

I had two offers accepted. My first solicitor asked for proof of funds immediately.
My second solicitor never asked... which I think is probably not a great sign, but not sure!

AdrianC

MaddyJohn wrote: »

We have an offer accepted and we have around 9% deposit because of which we classified for 5% LTV. Most of the agreement in principle came back saying they can lend us. However because of our visa type which only got checked during application stage, they said we are not qualified for 5% LTV.

LtV is the amount of the purchase price that you need a mortgage for.

So if you have 9% equity yourselves, you need a 91% LtV mortgage. 91+9=100

Above 90% LtV, lenders get very itchy, because there's much less room for error in the valuation in the event that the property needs repossessing. If they repossess and sell the property, and you still owe money, they can and will come after you for that shortfall. If you are a foreign national here on a visa, the chances of you leaving the country owing them money are much higher.

Post that we spoke to our solicitor and MB and he said until we do exchange of contracts , they wont be requesting proof of deposits which probably is around 8weeks from now. So we can save by end of Aug the 10% deposit.

But we just want to be sure that this is not going to cause an issue down the line?

No, you're simply borrowing less. Because you're borrowing less, the lender are less pernickerty about you and your status.

Sammypooler

What do they ask for proof? Just bank statements?

steampowered

You probably want to formally apply for the mortgage and go through the process of getting your mortgage offer, getting the survey done etc.

There is no reason you can't sort that all out now on the basis of a mortgage for 90% of the property.

You just need to have got the deposit together before exchange.

MaddyJohn

Thanks all, this helps a lot.

We have got the application accepted now and are waiting for our valuation to be done next week. Hoping everything goes through smoothly.

MaddyJohn

Bank statements and share statement if you have invested there.

Argyle88

We hear it is because they need to comply with money laundering rules, to make sure it is legit money. So an explanation - and written proof - is all they need. Maybe a bank statement and a solicitor letter saying you sold a previous property or inherited money. Thye will ask right at the start, as that is when their rules start.

AdrianC

Argyle88 wrote: »

We hear it is because they need to comply with money laundering rules, to make sure it is legit money. So an explanation - and written proof - is all they need.

They need to satisfy themselves. It's their decision what is needed to cross that bar.