source of funds for a loan to purchase a house

mrs_n

Hi all

we are looking to purchase a house - we are using our savings and have also got loans and gifts from a few friends and family.

We have sent the following paperwork but the solicitors are asking for further info.

As per the request of our solicitor we have sent the following info for each:

For loans - the persons name and address, company name where applicable, relationship to us, loan agreement and the ILA letter drafted by the solicitor to say they are providing the loan. The sums we have borrowed are £5000, £5000 and £2500

For gifts - the persons name, address, relation to us, id, bank statement, utility bills as well as the ILA letter drafted by solicitor that it is a gift. The gift amount is £2500

The solicitors are now asking us to provide source of funds for each one and asking for tax accounts for the company/ self employed accounts/ P60.

i feel that the solicitor is being unreasonable in asking for that info for the people who are providing the loans to us. they have provided their name and address and company name etc. which i feel should be sufficient. the people loaning to us do not want to provide all their info as they feel the solicitor is being overzealous.

I could understand them asking for all this further info if a mortgage provider was involved. But as we are not getting a mortgage, then surely it should be a much simpler process?

Could you please advise on this? How can we proceed?

Thank you for your help

davidmcn

mrs_n wrote: »

i feel that the solicitor is being unreasonable in asking for that info for the people who are providing the loans to us. they have provided their name and address and company name etc. which i feel should be sufficient. the people loaning to us do not want to provide all their info as they feel the solicitor is being overzealous.

Unfortunately your feelings are incorrect. The solicitors have to comply with anti-money-laundering requirements which oblige them to check the ultimate source of funds. The fact there isn't a mortgage involved doesn't make a difference. Refusal to provide the information will, if anything, make them more suspicious about what you're hiding.

Your solicitor isn't going to share the information provided with anyone else, so what are the other parties actually worried about?

mrs_n

i just feel that the people have been kind enough to loan us the amounts.
some people are no longer working (retired) and do not have any income coming in, so therefore cannot provide p60 etc. The gift amount is their savings.

Others have told us that they have loaned/gifted people money before (in the last few months) and have never been asked to provide this level of detail.

davidmcn

mrs_n wrote: »

i just feel that the people have been kind enough to loan us the amounts.

The solicitors aren't going to be swayed by how "kind" you or they think the people are. They need to know where the money has actually come from. The solicitors aren't doing it because they're nosy or awkward, they're doing it to avoid being fined for not complying with the regulations.

The gift amount is their savings.

So they can easily show statements showing that the funds have been sitting in their savings accounts for a suitably long time and haven't recently been passed to them by another party?

Others have told us that they have loaned/gifted people money before (in the last few months) and have never been asked to provide this level of detail.

Different solicitors will have different requirements, there are no universal rules about exactly what they need to get.

AdrianC

mrs_n wrote: »

i feel that the solicitor is being unreasonable in asking for that info for the people who are providing the loans to us. they have provided their name and address and company name etc. which i feel should be sufficient. the people loaning to us do not want to provide all their info as they feel the solicitor is being overzealous.

You can "feel" that all you like, but the solicitor has a legal duty to satisfy themselves that the source of funds is legitimate.

There is no way you're going to get around that. It's the law.

https://www.lawsociety.org.uk/support-services/risk-compliance/anti-money-laundering/
https://www.lawsociety.org.uk/support-services/advice/articles/quick-guide-to-the-money-laundering-regulations-2017/
http://www.legislation.gov.uk/uksi/2017/692/made

SpiderLegs

I feel that your ‘loans’ are in fact proceeds of criminal activity.
How on earth could this difference of opinion be resolved???

Albala

You're lucky your solicitor is being thorough. We suspect one reason our chain is falling apart may be the FTB at the bottom and their conveyancers may have between them failed to understand the H2B ISA and its limits and timescales.

Ec0

As people have said above, it all comes down to anti-money laundering regulations. They may have been gifts from friends and family but solicitors and mortgage brokers have a duty to check that it is legitimate.

AdrianC

Ec0 wrote: »

As people have said above, it all comes down to anti-money laundering regulations. They may have been gifts from friends and family but solicitors and mortgage brokers have a duty to check that it is legitimate.

...just in case those friends and famiglia happen to include Uncle Vladimir in Moscow, and Nonno Giuseppe The Hammer in Palermo.