Gifted deposit problems

Smily24

Lender is requesting for proof of funds from my brother who had given me £6000 as a gift towards my mortgage and he's reluctant to provide it. Can I retract the gift deposit form I had already submitted to the lender and delay the contract exchange for about 5wks since the house completion won't be until end of February next year. I can save the £5000 required to complete my deposit by the time I receive my November salary. That way I won't be needing the gift deposit. 

Carl2510

By end of Feb next year I guess your meaning a new build, if so no they will not let you delay unless they are desperate to sell. It’s 28 days you get to exchange. 

MattMattMattUK

One has to ask why your brother is unwilling to provide the proof of funds declaration? You might find it throws up more questions than retracting it answers, after all the money is still in your account and if you return it to your brother it will ten look like the initial declaration was in some way dishonest.

Smily24

@Carl2510: We've already gone 4wks past the contract exchange date. Developers understand that there's delays due to covid-19 especially with HTP scheme. They said they are happy as long as they are getting feedback from my mortgage adviser and solicitor that I'm doing all that's needed and providing all required documents. 

[Deleted User]

Now the gifted deposit is in your account I suspect that you retracting it when proof of the source has been requested will flag up as potential money laundering.  Convincing your brother to provide proof of where it came from will be a much simpler solution.  You can always pay him back through your savings at any point

Smily24

@MattMattMattUK: I get your point but shouldn't that be my brother's problem since he's the one that has refused to provide bank statements. Not that I want him to be in any form of trouble though but I guess he has the right to decide not to give his personal / confidential information 

davidmcn

Smily24 said:

@MattMattMattUK: I get your point but shouldn't that be my brother's problem since he's the one that has refused to provide bank statements.

It'll be your problem if your solicitor refuses to sign off on the source of your funds. 

Smily24

@Deleted_User: Thank you for your advice but if he is adamant that he's not going to provide it. I guess they will cancel my mortgage application. 
Will they accept another gifted deposit and source of fund from my other brother or accept my personal savings instead of gifted deposit 

MattMattMattUK

Smily24 said:

@Deleted_User: Thank you for your advice but if he is adamant that he's not going to provide it. I guess they will cancel my mortgage application. 
Will they accept another gifted deposit and source of fund from my other brother or accept my personal savings instead of gifted deposit 

It is hard to tell in advance, but you might find it becomes a far bigger issue than just a mortgage application. Having £6k in your bank account that they may suspect of being from unscrupulous sources may have far bigger ramifications, sending it back to your brother will not stop that happening because the in and out transaction will still show on your bank statements and if another brother pays a similar amount into your account it may just look like the money has gone on a bit of a merry-go-round through various bank accounts to hide it's true source, something which would be highly indicative of money laundering. 

You need to talk to your solicitor and brother, but there is going to be a very strong suspicion cast on things now as refusing to provide proof of funds would appear to be indicative of those funds not being legitimate, if someone had a legitimate source they would have no qualms about providing it.

[Deleted User]

as above, difficult to say how it will be handled.  Mortgage wise i cant see it being a problem.  Most of the time we dont specify the source of the gift on the application unless there is a specific gifted deposit form required.  Had a case recently where the gift was changed from in-laws to parents a few days before exchange as they had problems cashing in investments.  Didnt see to cause any issues. 

The solicitor takes most of the brunt for signing off the source of funds so depends on how they feel about it. There arent any real written rules, its just to satisfy any concerns.   If you transfer money back to brother A and get a gift from brother B then the solicitor could (not saying they will) request a bank statement showing the money leaving your account, a statement showing it in brother A's account, a statement from brother B showing it leaving their account along with any statements with where the money has been originally, and then another statement showing it hit your account.  

They could do none of this though, its up to the individual solicitor

Thrugelmir

Smily24 said:

@Carl2510: We've already gone 4wks past the contract exchange date. Developers understand that there's delays due to covid-19 especially with HTP scheme. They said they are happy as long as they are getting feedback from my mortgage adviser and solicitor that I'm doing all that's needed and providing all required documents. 

Patience will wear thin though if there's no progress.