Proving no gifted deposit on mortgage?

agbero

Has anyone encountered a solicitor suggesting money gifts received into a bank account, which is used to fund the Help to Buy ISA deposit account, albeit up to 15 months previous should be counted as a gifted deposit? 

The money was not transferred with any intention, or interest, whatsoever to it being used as a house deposit and was spent or saved by the recipient on other things. Consequently the recipient entirely funded the mortgage deposit entirely from own earnings however the solicitor is suggesting that a couple of small amounts of <£1000 are a gifted deposit for that mortgage - how absurd - wonder if the solicitor is simply seeking to rack up their fees as it seems overly-onerous.

Any information or guidance gratefully received. Thanks

user1977

Have you pointed out to them that there are sufficient funds from earnings to make up the deposit? If that's the case, I don't see a need to investigate the source of any additional funds.

DullGreyGuy

What is the total deposit? What is the total value of the gifts?

It doesn't really matter if someone gives you £100,000 to do what you please with and you choose to use it for a property deposit or if they explicitly give it to you for a deposit the point will remain that banks will want to ensure it is a true gift and not a loan plus the consideration of how much you've managed to save yourself through financial management

agbero

DullGreyGuy said:

What is the total deposit? What is the total value of the gifts?

It doesn't really matter if someone gives you £100,000 to do what you please with and you choose to use it for a property deposit or if they explicitly give it to you for a deposit the point will remain that banks will want to ensure it is a true gift and not a loan plus the consideration of how much you've managed to save yourself through financial management

Thanks for your thoughts.....

Total deposit is £20k, saved into Lifetime ISA over 4 years

'Gifts' suggested to be 'gifted deposits' are 1) £1k gift from me 15 months ago, 2) a £2,830 repayment of recipient's own money from joint family savings account held by recipient's sister - £2k of this was then lent to me and repaid by me 2 months later - 3) that £2k loan repayment from me is also being questioned.

Thanks

spoovy

Are you not the "recipient"? Bit confusing how you're wording it.

agbero

spoovy said:

Are you not the "recipient"? Bit confusing how you're wording it.

No, I'm the 'gifter' my partner is the 'recipient' - that is the one trying to take out the mortgage (sorry for confusion!)

spoovy

If the "joint family savings account" has your partner's name on it I don't see why that would be a problem or why he/she would need to justify it. 
If it doesn't though, then it looks very much like a £2,800 gift from his/her sister. The fact that a big chunk of that money was temporarily shuffled to your account and back again doesn't seem relevant. 

simon_or

agbero said:

spoovy said:

Are you not the "recipient"? Bit confusing how you're wording it.

No, I'm the 'gifter' my partner is the 'recipient' - that is the one trying to take out the mortgage (sorry for confusion!)

Which bank is it? It could be a criteria related issue.

From a previous time when I couldn't go on the mortgage due to adverse issues but the deposit was half mine, my broker had said that some banks will not allow non-borrowing occupiers to contribute anything to the deposit and some don't care. It's a while ago so I can't be sure but I think my broker went with Halifax in the end.

Perhaps that is relevant in this scenario and hence the solicitor going into such detail.

kingstreet

Contributing to the deposit and residing in the property when being party to neither mortgage nor ownership is an issue for many lenders.

agbero

simon_or said:

agbero said:

spoovy said:

Are you not the "recipient"? Bit confusing how you're wording it.

No, I'm the 'gifter' my partner is the 'recipient' - that is the one trying to take out the mortgage (sorry for confusion!)

Which bank is it? It could be a criteria related issue.

From a previous time when I couldn't go on the mortgage due to adverse issues but the deposit was half mine, my broker had said that some banks will not allow non-borrowing occupiers to contribute anything to the deposit and some don't care. It's a while ago so I can't be sure but I think my broker went with Halifax in the end.

Perhaps that is relevant in this scenario and hence the solicitor going into such detail.

Thanks

My partner has saved the deposit entirely on her own and is buying her house entirely on her own (the mortgage is in her name alone) - I have my own house and am no part of my partner's house purchase. 

But, because I gave my partner a present last year May of £1k, the solicitor is suggesting that was a 'gifted deposit' towards her mortgage - tbh, it very much feels like the onus is on her to prove it is not a gifted deposit (which it wasn't) rather than the other way around.  It just feels v odd, as I've never heard of anyone having to provide bank statements to show if they have any sums of cash received from 3rd parties and thereafter asked to disprove that these were 'gifted deposits'. 

agbero

kingstreet said:

Contributing to the deposit and residing in the property when being party to neither mortgage nor ownership is an issue for many lenders.

Yes, I've neither contributed to the deposit, nor will I contribute to the mortgage or will I live in the property - it's entirely my partner's property and hers to live in alone.