Deposit source for mortgage

Lawsie01

So here’s the situation. My partner  and I are looking to buy a house together. I am a first time buyer and He has owned a property in the past. He’s in a newish job and is currently on furlough, his credit isn’t great either but has improved a lot recently. However, because of this and the type of property we want I have looked into going down the help to buy route as a sole application in my name as we aren’t married. The brokers I have spoken to have said this is absolutely fine and based on my own affordability there are no issues with this (my credit isn’t perfect, I’ve got 4 defaults, 2 are settled and 2 I am paying, the youngest one was registered in 2017). We have the full 5% deposit saved to work with help to buy. The way we work our money is that I pay EVERY household bill and rent out of my personal current account every month, which is where my wage is paid into. I then transfer what I have left into our joint account. He pays his bills out of his personal current account and then transfers what he has left into the joint account to effectively pay me back for what I have paid in bills. I then transfer an amount each month into my own personal savings account from the joint account, and this is where I have been saving for the house deposit. What’s then left in the joint account is money for food and leisure each month. 

My query is, does that money in my savings account belong solely to me and when lenders/solicitors are looking at the source of the deposit, will they accept that this is my money or could it look like he has gifted it to me (which I know is a big no, no with most lenders)? A couple of the brokers I have spoken to don’t seem to think it will be an issue, they have found lenders which won’t mind him living at the house without been on the mortgage, and they seem to think that because the funds have built up over time and not gone in as a lump sum that the lender and solicitor will be satisfied with that and not delve any deeper (the transactions on the savings statement only have my name on even though they have come from the joint account). They have only asked me to send them my personal bank statements and savings statements not joint account statements. I can evidence that over the last 2.5 years that I have transferred into savings for that alongside what I have paid in from my wage, other things like bonuses, monetary awards and a lump sum from my pension that I received have all gone through the joint account, and when I look at the full history I have paid well more than the deposit amount saved into the joint account. The savings has been used to pay for holidays and other large purchases sometimes and then topped back up. My concern is that it will be seen as joint money and effectively my partner gifting me money even though it is sat in my own savings account. And I’m cautious of going through a mortgage application only for these checks to allow it to decline. How can I prove that the money belongs to me? Sorry, I should’ve warned you it’s a long one at the beginning! 

jemima82

Lawsie01 said:

So here’s the situation. My partner  and I are looking to buy a house together. I am a first time buyer and He has owned a property in the past. He’s in a newish job and is currently on furlough, his credit isn’t great either but has improved a lot recently. However, because of this and the type of property we want I have looked into going down the help to buy route as a sole application in my name as we aren’t married. The brokers I have spoken to have said this is absolutely fine and based on my own affordability there are no issues with this (my credit isn’t perfect, I’ve got 4 defaults, 2 are settled and 2 I am paying, the youngest one was registered in 2017). We have the full 5% deposit saved to work with help to buy. The way we work our money is that I pay EVERY household bill and rent out of my personal current account every month, which is where my wage is paid into. I then transfer what I have left into our joint account. He pays his bills out of his personal current account and then transfers what he has left into the joint account to effectively pay me back for what I have paid in bills. I then transfer an amount each month into my own personal savings account from the joint account, and this is where I have been saving for the house deposit. What’s then left in the joint account is money for food and leisure each month. 

My query is, does that money in my savings account belong solely to me and when lenders/solicitors are looking at the source of the deposit, will they accept that this is my money or could it look like he has gifted it to me (which I know is a big no, no with most lenders)? A couple of the brokers I have spoken to don’t seem to think it will be an issue, they have found lenders which won’t mind him living at the house without been on the mortgage, and they seem to think that because the funds have built up over time and not gone in as a lump sum that the lender and solicitor will be satisfied with that and not delve any deeper (the transactions on the savings statement only have my name on even though they have come from the joint account). They have only asked me to send them my personal bank statements and savings statements not joint account statements. I can evidence that over the last 2.5 years that I have transferred into savings for that alongside what I have paid in from my wage, other things like bonuses, monetary awards and a lump sum from my pension that I received have all gone through the joint account, and when I look at the full history I have paid well more than the deposit amount saved into the joint account. The savings has been used to pay for holidays and other large purchases sometimes and then topped back up. My concern is that it will be seen as joint money and effectively my partner gifting me money even though it is sat in my own savings account. And I’m cautious of going through a mortgage application only for these checks to allow it to decline. How can I prove that the money belongs to me? Sorry, I should’ve warned you it’s a long one at the beginning! 

It might be worth posting this on the Mortgage board. I would think that as you are financially linked to your partner (joint account) that this could have an impact.

It would be helpful to understand the figures - why do you empty your account (all bills, then remainder to joint account), prior to moving money to your savings?

Is it possible for 3 months that your savings go straight from your current account to your savings (and partner pays some bills/rent if needed to make this possible?).

Money in your savings account is solely yours because it’s in your account.

Again figures would be helpful but if you do succeed in buying in your own name, how do you plan to manage what (if any) share of/right over the property your partner has? Will he be contributing to the mortgage? 

Lawsie01

Thanks for your reply. We’ve always managed our money this way since we had kids, i can’t quite remember how it came about but actually works really well for us. He would be happy to sign something to say he doesn’t have a claim on the property and I would be happy to pay the mortgage on my own but he would contribute to other bills. So if the money in my savings account is mine, they may not want to look any further as they will be satisfied that the transfers are showing as my name on the statement to my account? 

Seashell517

HtB no longer allow married couples to apply in only one partners name. I guess it might be different if you're not married, but I would want to check if HtB will have issues with money coming from joint accounts where only one partner is applying...

thaddy

We do something similar with our personal accounts and the joint account but my savings were in a lifetime ISA. We made a joint mortgage application and the lender only wanted to see 3months of bank statements where my salary was paid into as proof of income and for proof of funds I submitted my LISA balance. For the anti-money laundering checks with the solicitor they just wanted to see the build up of funds so depending on their requirements, 3-6months of your savings and personal account statements should suffice. As long as there is evidence showing how you accumulated your deposit it will be fine. All the best!

Lawsie01

Seashell517 said:

HtB no longer allow married couples to apply in only one partners name. I guess it might be different if you're not married, but I would want to check if HtB will have issues with money coming from joint accounts where only one partner is applying...

We aren’t married. I know HTB do credit checks, but I wasn’t aware they wanted access to bank statements etc like the lender? 

Lawsie01

thaddy said:

We do something similar with our personal accounts and the joint account but my savings were in a lifetime ISA. We made a joint mortgage application and the lender only wanted to see 3months of bank statements where my salary was paid into as proof of income and for proof of funds I submitted my LISA balance. For the anti-money laundering checks with the solicitor they just wanted to see the build up of funds so depending on their requirements, 3-6months of your savings and personal account statements should suffice. As long as there is evidence showing how you accumulated your deposit it will be fine. All the best!

Thank you, that puts me at ease. My broker has only asked for personal and savings account statements even though he knows about the joint account. The savings have been building up for a couple of years so hopefully this will satisfy them. 

Thrugelmir

Solicitor may well ask to see statements that account for the deposit.