Source of funds - sorted before house offer?

sidneyyoungblood

A bit of advice please  , coming up to my 50th birthday finally decided to buy a property .. got the full amount without the need for a mortgage ( or possibly 10 - 15% ) after years of saving .

Issue is that I have been chasing interest rates for the last 5 years going through around 10 different banks accounts sending partial amounts to keep under the FSCS , all the funds have come from my soletrader business selling online ( no cash deposits ) .. 

Is it possible to contact a solicitor beforehand to sort out the " source of the funds " before I make any offers ?

user1977

If you like, though assuming you have statements showing the funds being chucked around your accounts, I wouldn't expect there to be any problem.

sidneyyoungblood

user1977 said:

If you like, though assuming you have statements showing the funds being chucked around your accounts, I wouldn't expect there to be any problem.

W Thanks would I need to show for example - coming from natwest into chase into rasin into lloyds into starling etc as I am not too sure if I could access the files.... All the funds originally came from my soletrader business account - would that be enough?

user1977

sidneyyoungblood said:

user1977 said:

If you like, though assuming you have statements showing the funds being chucked around your accounts, I wouldn't expect there to be any problem.

W Thanks would I need to show for example - coming from natwest into chase into rasin into lloyds into starling etc as I am not too sure if I could access the files.... All the funds originally came from my soletrader business account - would that be enough?

Ideally you want a paper trail showing the transfers between your own accounts, rather than funds coming from (arguably) a different source. Depends how far back the solicitors want to go, it varies.

Slinky

I had a massive paper trail to account for when we bought our house. OH had been chasing interest rates, and I had to show the source/trail of every deposit of (I think) £500 or more. I had to go back 12 months. Loads of paper and lots of different marker pens.  I would suggest you find out from your intended solicitor how far back they want you to go.

Annoyingly I ended up doing it twice as we pulled out of the purchase of one house and it was several months later that we found the one we bought.

grumpy_codger

I don't think that any solicitor would want to trace funds 5 years back unless they see anything looking really suspicious during the recent months. My worst experience was with the one wanting 2 years - and I had dozens of accounts with various banks and BSs, including almost £100K in regular savings accounts. Finally she agreed to 1 year, but the purchase fell through because of some other reason.

Next time the first question I asked a new solicitor was how many months of history they wanted (explaining why and saying that, generally, I had nothing to hide). And my current one wanted just 3 months.

My feeling is that solicitors pay more attention to cash buyers. With a mortgage, even a small one, this can be easier.

AskAsk

the number of accounts isn't a problem.  i have 15 right now!  you need to show where the money comes from.  so if it comes from your sole trader business then you will need to produce HMRC tax returns over the last 3 years to show your annual income.

the solicitors need to see how you got the money and if you had been running a business, you need to have paid tax, else it is tax evasion money and that is how they catch you out.

and so they need to be satisfied that the earnings from your business from when it started is enough to amount to the savings you have to buy the property.

grumpy_codger

AskAsk said:

 you need to show where the money comes from.  so if it comes from your sole trader business then you will need to produce HMRC tax returns over the last 3 years to show your annual income.

Three years show nothing if someone is buying for cash saved over decades. IIRC my solicitor wanted only 3 last payslips, but I added P60 just in case.

RHemmings

grumpy_codger said:

I don't think that any solicitor would want to trace funds 5 years back unless they see anything looking really suspicious during the recent months. My worst experience was with the one wanting 2 years - and I had dozens of accounts with various banks and BSs, including almost £100K in regular savings accounts. Finally she agreed to 1 year, but the purchase fell through because of some other reason.

Next time the first question I asked a new solicitor was how many months of history they wanted (explaining why and saying that, generally, I had nothing to hide). And my current one wanted just 3 months.

My feeling is that solicitors pay more attention to cash buyers. With a mortgage, even a small one, this can be easier.

I was asked for accounts going back 7 years. In my case, some of the funds were overseas. I had received some of my inheritance, and had transferred funds from overseas to my UK account. Both chunky sums. There was no problem in the end, but I was asked. 

The OP probably doesn't have the same situation as me. I just wanted to point out my example of being asked for accounts beyond 5 years. 

sidneyyoungblood

Thanks for all the comments... would it be possible to try and get the paper trail sorted before making an offer on a property ?  I phoned a couple who said they cant do anything until I find a property  , is this correct ?( Is it a convergence solicitor I need.)

Slinky

sidneyyoungblood said:

Thanks for all the comments... would it be possible to try and get the paper trail sorted before making an offer on a property ?  I phoned a couple who said they cant do anything until I find a property  , is this correct ?( Is it a convergence solicitor I need.)

TBH I can't see solicitors wanting to get too involved with anyone who isn't actually buying a property right now. They could end up doing work they never see a return from if you don't find somewhere you like, or you change your mind and use a different solicitor. Solicitors are usually up to their necks with dealing with pressing issues in their current transactions. As a result, looking at your paper trail in advance of a definite purchase is never going to reach the top of their to-do list IMO.