Solicitor Bank statement for mortgage & thirft contribution.

Tunde0677

Hi everyone,
I currently got a mortgage offer on HTB, and our deposit is 11k , I have a giftor that is 5k and this has been processed during the mortgage application, so no issues with that. I have got to the stage where I need to show my bank statement to my solicitor. My issue now is part of our savings was 3k currently sitting in our account now, and other 3k is coming from thirft contribution among our friends which is £500 each month for 6 months, as I am collecting the last and final month.
My question is, how do I explain to the solicitor once the money is transferred to my bank statement as this is not a gift. Do I need anything from the person transfering the money.

davidmcn

What's a "thirft contribution"? If there are other parties contributing to the price then you'll need to clear it with the lender. If it's not a gift, what is it?

foxy-stoat

Not heard of a Thirft contribution - what did you tell the lender that part of your saved/gifted deposit was a loan?

Tunde0677

A thrift contribution is when a group of people contribution money on weekly or monthly basis together and each get their turns of collection. It commonly practice in Africa and Asia, it's a kind of savings.

JayCeeEssex

Likewise, I have never heard of 'thrift contributions' as a deposit.
The problem I see here from your description is that the funds have come from a number of different sources.
So to correctly evidence where the funds have come from for this element of the deposit, both the lender and the solicitor should have sight of bank statements from all the persons who have contributed to this element of the deposit.
I doubt this will be straightforward, but the lender and solicitor should be made aware of the situation sooner rather than later.

csgohan4

Your going to have to satisfy money laundering regulations from your solicitor so you will need to speak to them what they want and explain how the money is obtained.

davidmcn

Tunde0677 wrote: »

A thrift contribution is when a group of people contribution money on weekly or monthly basis together and each get their turns of collection. It commonly practice in Africa and Asia, it's a kind of savings.

Ah, what we in Scotland call a "menage". Never seen it become involved in a house deposit, so I would expect the lender and/or your solicitor to ask questions.

LawAbiding

We call it "Committee" in the South Asian community.

Let's say 30 people decide to take part, each contribute £200 per month. As there is 30 people, it will run for 30 months, and each month, each person will receive the total value.

Some "Committees" pick the order on who gets the total value out of a hat, if you get picked number 2, you get £6000 in month 2. Month 1 is usually reserved for the person who adminstrates it.

Kentish_Dave

That sounds like a nightmare for money laundering checks and if it’s still running it’s also a debt.

What’s the supposed rationale behind this sort of scheme? If you are honest your expected return is zero but you are taking on risk.

LawAbiding

It is a nightmare, do most people stay away now as truing to explain it for money laundering checks is difficult.

The purpose is the possibility of getting up front cash if you lucky to be selected for the first few payments. I know someone who is hoping to start one next few months on basis they would get it early to purchase a car. It's interest free loan in essence, although you not garunteed to get it right away.

You have to have complete trust in the people who administrate it, so usually it's family or close friends

Tunde0677

Well, it definitely not money laundering because it's a form of contribution among group of trused family and friends, to help out in a financial project like this. I have a family friend that mentioned it in the mortgage process last year and got his mortgage HTB. I will contact him.
Like I said, it's my money contributed on monthly basis, just that within that period members will take turns and end when final person take its own, just like a credit union cooperative.