Inheritance & new ‘house deposit as a gift’ rule?

fiwen30

Wasn’t sure whether to post in here, or over in House Buying, Renting & Selling.

I was the sole beneficiary of my late mum’s small estate, and inherited 9.5k as she only had cash assets. My partner and I are first time buyers, and that 9.5k would equate to about half of our deposit amount. However, I’ve heard that there is a new rule(?) being put in place whereby a buyer must prove that they’ve saved their deposit themselves, rather than having it gifted by someone, eg. parents.

Would this inherited money count as a gift, or would we be able to use it towards our deposit?

AnotherJoe

I'd say this is the wrong forum.
As for whether it counts as saving it yourself, that probably depends on the lender, there's no actual government rule. Perhaps use a mortgage broker? Anyway I suggest you repost in the other forum there are some mortgage brokers there who will likely know. 

Keep_pedalling

Probably best asking on the mortgages board, but I don’t think an inheritance comes under these rules and if you have held this money for more than 12 months will still count as savings.

Linton

Inheritance should not be a problem.  Mortgage companies dont like gifts unless it is 100% clear that the gift is not a disguiosed loan as it would affect the affordabililty.  But in your case that is not an issue.

badger09

Mickey666 said:

In the recent news reports about Nationwide no longer allowing gifted deposits (for 95%LTV loans) it was specifically stated that inheritances were allowed as deposits.  Personally this seems inconsistent to me, but that was Nationwide’s stance.
As mentioned above, this is not an industry-wide rule or government law so it’s a case of asking around, or getting a broker to do that for you.

I don't see any inconsistency

As Linton said:

Inheritance should not be a problem.  Mortgage companies dont like gifts unless it is 100% clear that the gift is not a disguiosed loan as it would affect the affordabililty.  But in your case that is not an issue.

A live donor could request the return of a gift disguised as a loan. A dead donor is unlikely to do that  

katiepoppycat

The solicitors will want to see something that details the inheritance - solicitors letter, estate accounts, copy of the will etc.  Thats what happened with me last year.  It was a bit of a pain as I was sole executor and diy-ed it like a good MSE ite so couldn't produce a solicitors letter!

fiwen30

katiepoppycat said:

The solicitors will want to see something that details the inheritance - solicitors letter, estate accounts, copy of the will etc.  Thats what happened with me last year.  It was a bit of a pain as I was sole executor and diy-ed it like a good MSE ite so couldn't produce a solicitors letter!

Yikes, that sounds like a pain.
I have a copy of her will, which states I’m the sole beneficiary of her estate, which will hopefully do.

Keep_pedalling

Mickey666 said:

badger09 said:

Mickey666 said:

In the recent news reports about Nationwide no longer allowing gifted deposits (for 95%LTV loans) it was specifically stated that inheritances were allowed as deposits.  Personally this seems inconsistent to me, but that was Nationwide’s stance.
As mentioned above, this is not an industry-wide rule or government law so it’s a case of asking around, or getting a broker to do that for you.

I don't see any inconsistency

The inconsistency, to me, is that Nationwide were arguing that by not accepting gifted deposits it implied that mortgage applicants must be financially prudent and capable of saving their own deposit - which I can understand.  The inconsistency is to allow an inheritance as a deposit, which in all practical senses is the same as a gift.

The one difference between an inheritance and a gift is that the lender is 100% certain that the inheritance is the borrowers money. Some “gifts”, despite declarations to the otherwise, are actually loans.