Gifted deposit, first time buyers advice

booberrymuffin

Hi, my husband and I have been struggling to gather enough money for a deposit on a house for a long time, our rent is very high and it means our ability to save has been slow. My grandmother has offered to boost our 5% deposit to a 15% deposit by gifting us the amount. I know that she will need to provide a proof of gifting the deposit letter but does she put the money into our accounts before we apply for a mortgage? Does she keep it in her account and then we tell the mortgage lender that she's gifting it? We will be getting advice from a financial advisor at some point but I just wanted to know what is generally done in these situations. Thank you

Carrot007

Makes no odds when it is moved as long as it it before it is needed.

Important parts will be her provideing statement that show it in her account for a length of time or where she got it from if less and a signed statement it is a gift. Whithout those yuou are going nowhere (and yes some people happy to give the money end up not doing that part for "reasons").

Dreamingandimpatient

Hello, we have been gifted a deposit.  Our mortgage lender asked for one of their 'gifted deposit' forms to be completed by our giftee and signed.  Our solicitors are the ones who looked into it at depth for money laundering.  They wanted to see bank statements to see where this money had come from.  It had come from a house sale back in 2017 so they asked to see a letter from my parents solicitors confirming sale of the property and the amount of money being transferred to their bank then they wanted bank statements to show this money being paid in and then paid into a savings account and then being put into my account.  It is intrusive but all part of the package, we had two choices.  Accept the gift and hope my parents would agree to all this or refuse.  Luckily my parents were OK  but I'm sure they would have preferred I didn't know all their financial details.  Good luck!

booberrymuffin said:

Hi, my husband and I have been struggling to gather enough money for a deposit on a house for a long time, our rent is very high and it means our ability to save has been slow. My grandmother has offered to boost our 5% deposit to a 15% deposit by gifting us the amount. I know that she will need to provide a proof of gifting the deposit letter but does she put the money into our accounts before we apply for a mortgage? Does she keep it in her account and then we tell the mortgage lender that she's gifting it? We will be getting advice from a financial advisor at some point but I just wanted to know what is generally done in these situations. Thank you

da_rule

It’s the solicitor who is likely to have a preference rather than the lender (as the solicitor will confirm to the lender that they are happy with the source of funds). 

I would keep the funds separate for now and see what the solicitor wants. Some are happy for the gift to be made and then transferred to the solicitors account, some prefer to receive the gift element directly from the person making the gift. 

AdrianC

Ultimately, the solicitor HAS (by law) to satisfy themselves that the source of the funds is legitimate.

I'm sure your generous Sicilian godfather would prefer not to have to fill the paperwork in, but...