Changing gifted deposit sources after mortgage offer?

KassE11

We got our mortgage offer 3 weeks ago from nationwide. However when we did our application, we put our deposit as 20k gift from my dad, 5k gift from my brother and 5k from myself& partner. Total of 30k, 25 of which is gifted. We did all the gift forms everything.

However now at the conveyancing stage, my brother has had to withdraw from giving us a gifted depo as his family have run into financial issues. However we are able to put the extra 5 in from ourself so now it is 20k gifted from my dad and 10k from us.

Is this likely to cause an issue? As we are in the final stages now. We haven't  used a new source of funds. Just bumped up how much we are putting in ourselves to cover my brother pulling out?

Solicitor has said it shouldn't be an issue and has put forward to the lender that we've satisfied all the money laundering checks. Just the exchange of contracts left and completion date in just under 2 weeks finalised.  I really don't want things falling through at this point? Can't find any information about a similar situation online. Any advice, help? Thank you

NewShadow

As per your solicitors advice - your lender is concerned if you have the money. The only concern they would have is if a gift became a loan - it's their responsibility to ensure the mortgage is affordable and any new debt impacts on that calculation, plus they need assurance that no-one else has a claim on the property which could increase the risk they're talking in loaning you what you need to purchase. 

Your solicitor is concerned regarding the source of the money as it's their responsibility to carry out due diligence re money laundering and the like. 

If your solicitor is content with the source of your funds then your lender should have no concerns. 

KassE11

That's fine. I was still reluctant as this is our 3rd application and I really dont want things to fall through at this point and really don't  want to take any chances because something else was said during application ( dad 20k, brother 5k and us 5k) but at the last minute it was changed. I've seen posts where offers have been withdrawn right before completion and and praying it doesn't happen to us.

As I said anyway the solicitors have reported the gift to the lenders anyway so if anything does happen we will find out in a few days. Fingers crossed it's all okay

tetrarch

NewShadow said:

As per your solicitors advice - your lender is concerned if you have the money. The only concern they would have is if a gift became a loan

Is there anything to stop the giftER loaning the giftEE the same amount again and then the giftEE gifting the money to the original giftER?

Regards

Tet

hazyjo

If you can show money (adding up to the additional £5k) going into your account from wages or other legit means, it should be fine. If you've had five grand suddenly drop into your account, then obviously it would look rather dodgy!

NewShadow

tetrarch said:

NewShadow said:

As per your solicitors advice - your lender is concerned if you have the money. The only concern they would have is if a gift became a loan

Is there anything to stop the giftER loaning the giftEE the same amount again and then the giftEE gifting the money to the original giftER?

Regards

Tet

Erm... any contrived arrangement to secure a mortgage is mortgage fraud... which is a serious offence; it could also result in the 'gifter' being deemed to have a beneficial interest in the property - and therefore be liable for GCT on any future sale, even if they don't actually receive any of the profits.  

Only you can asses the risk of such an act being discovered - but note HMRC have been known to trace money back 20 years in situations where they suspect tax evasion and the penalties are harsh. 

Should you choose to take this route - The 'gifter' would have to be aware they would be unable to legally enforce the debt and would have no legal claim on the property as the money would be legally a gift.   

seradane

NewShadow said:

tetrarch said:

NewShadow said:

As per your solicitors advice - your lender is concerned if you have the money. The only concern they would have is if a gift became a loan

Is there anything to stop the giftER loaning the giftEE the same amount again and then the giftEE gifting the money to the original giftER?

Regards

Tet

Erm... any contrived arrangement to secure a mortgage is mortgage fraud... which is a serious offence; it could also result in the 'gifter' being deemed to have a beneficial interest in the property - and therefore be liable for GCT on any future sale, even if they don't actually receive any of the profits.  

Only you can asses the risk of such an act being discovered - but note HMRC have been known to trace money back 20 years in situations where they suspect tax evasion and the penalties are harsh. 

Should you choose to take this route - The 'gifter' would have to be aware they would be unable to legally enforce the debt and would have no legal claim on the property as the money would be legally a gift.   

I think you misunderstand tetrarch - he was suggesting OP lend the money to the brother who can "gift" it back. No third party involved.

For what it's worth I don't think that's necessary, you should be fine.

Thrugelmir

seradane said:

NewShadow said:

tetrarch said:

NewShadow said:

As per your solicitors advice - your lender is concerned if you have the money. The only concern they would have is if a gift became a loan

Is there anything to stop the giftER loaning the giftEE the same amount again and then the giftEE gifting the money to the original giftER?

Regards

Tet

Erm... any contrived arrangement to secure a mortgage is mortgage fraud... which is a serious offence; it could also result in the 'gifter' being deemed to have a beneficial interest in the property - and therefore be liable for GCT on any future sale, even if they don't actually receive any of the profits.  

Only you can asses the risk of such an act being discovered - but note HMRC have been known to trace money back 20 years in situations where they suspect tax evasion and the penalties are harsh. 

Should you choose to take this route - The 'gifter' would have to be aware they would be unable to legally enforce the debt and would have no legal claim on the property as the money would be legally a gift.   

I think you misunderstand tetrarch - he was suggesting OP lend the money to the brother who can "gift" it back. No third party involved.

For what it's worth I don't think that's necessary, you should be fine.

The brother may not be an acceptable souurce to the lender. If the money has been given to the OP by the brother , and now being declared as their funds. Then that's likely to be considered fraud. As the assumption will be that it's actually a loan.