Deed of Guarantee?

proformance

Hi guys
I arranged for a family gift as a contribution to the mortgage deposit.
The solicitor has sent us the contract, along with a "Deed of Guarantee". Is this because of the "gift"? If so, is there a reason why the two are connected, as I can afford the mortgage repayments on my own from an affordability perspective and it is the first time that I have seen any mention of a "Deed of Guarantee".
Thanks,
Z

dimbo61

Maybe best to speak to your solicitor.
Deed of Guarantee is normally to do with acting as Guarantor for a tenancy agreement.
However you may need to proved proof that the Gift of money is just that A Gift and not a loan.
They may also want bank statements to prove the gift has gone from Mum/Dad's bank account and into your bank account ! 
Money laundering regulations

davidmcn

I presume the guarantee is by the gifter, in support of your liabilities under the mortgage? Or is it something else?
Does your mortgage broker (or whoever arranged the mortgage for you) think there's meant to be a guarantor?

eddddy

A Deed of Guarantee wouldn't be connected to a gifted deposit - that's two different things.

A Deed of Guarantee suggests that you would act as Guarantor for the mortgage payments. i.e. If the borrower doesn't pay their mortgage, the mortgage company can claim the money from you.

Maybe speak to the family member first, to see if that's what they've asked for - as opposed to somebody making a mistake and sending you the wrong document.

If that really is what the family member has asked for, I guess you need to think very carefully before taking on that huge commitment.  And the mortgage lender might require you to get independent legal advice from a solicitor - not the same solicitor that the family member is using.

proformance

The family member has asked for nothing of the sort. They just had initially written a letter to say that £5,500 was a gift from them to me (the borrower) toward the deposit amount and sent it alongside proof of their income etc.
At no point did we, nor the lender request a "guarantor", and, I can definitely afford the mortgage without one, hence te confusion.


I thought I'd ask here first to see if there was indeed some connection between a deposit gifter and them having to also act as a guarantor, but it seems not - Perhaps a mistake on my solicitor's side? I will speak to him in the first instance then.

davidmcn

proformance said:

Perhaps a mistake on my solicitor's side? I will speak to him in the first instance then.

You should always be speaking to your solicitor in the first instance anyway!

You sure the mortgage offer doesn't mention anything about a guarantee? Could be an error by the lender. 

proformance

Found out that he just includes the letter as a matter of course - not needed in our case and advised to simply ignore.

Thanks for your help all.
As always!