Proof of Funds - old savings. Is PoF a system that Martin needs to look at.

Herzlos

Elliott.T123 said:

Every house I have ever bought, every house my parents have bought, every house my in-laws have bought (using far bigger cash figures than you mentioned, one of the purchased was over £1m in cash) the "proof of source of funds" has been a simple case of, here is the bank account / accounts the money is in, it has been here for 12 months. That is all the proof that was required.

I'm convinced there must be some other issue at play we're just not catching. I don't think it was mentioned anywhere, but what country are you in? We're assuming England but it's possible you're somewhere with completely different rules and we're talking at cross purposes. 

What country is your money in? What kind of savings account?

jnorth55

fistfulofsteel said:

I'm considering DIY conveyancing to get around this issue. I'm buying into a property for £100k cash and tbh I don't know where exactly the money came from as bank statements don't go back far enough. I know I've been self employed and filling tax returns since 2012, but HMRC doesn't allow you to access them beyond a few years. I think my higher earning years were around the mid 2010s and recent years have been just enough to cover my very low living costs. I had some money (don't know how much) before I started work from a mixture of parents putting every birthday/Christmas gift since I was a baby into savings and not spending all my student loan but don't have records. I remember being given a few thousand after my grandmother died in the mid 00s but there's no family left to ask, and again, bank records don't go back that far. I remember I made a few thousand buying a tiny amount of bitcoin, forgetting I had it for years, and then selling it on an exchange that no longer exists sometime in the late 2010s. I move my savings every time an interest rate falls or a better deal comes on the market and didn't realise I needed to keep records, so I don't have access to old statements or even know the account numbers of closed accounts. I've changed email address, postal address and even my name since most of the money came into my possession.

I know I have the money mostly as a result of the wonder that is compound interest but no idea where to start in proving it. My income is currently very low, so bank statements show I'm taking money out of savings each month rather than putting it in.

MSE has all these pages encouraging you to switch savings accounts but no warnings that you need to keep records or you won't be allowed to spend the money later.

The issue you'll have with DIY conveyancing is that it isn't only on your side that there are checks. The solicitors for whoever is selling the property will no doubt also check. 

jnorth55

Herzlos said:

Elliott.T123 said:

Every house I have ever bought, every house my parents have bought, every house my in-laws have bought (using far bigger cash figures than you mentioned, one of the purchased was over £1m in cash) the "proof of source of funds" has been a simple case of, here is the bank account / accounts the money is in, it has been here for 12 months. That is all the proof that was required.

I'm convinced there must be some other issue at play we're just not catching. I don't think it was mentioned anywhere, but what country are you in? We're assuming England but it's possible you're somewhere with completely different rules and we're talking at cross purposes. 

What country is your money in? What kind of savings account?

Seriously, doesn't it show the issue that you assume there must be something to do with me. It really isn't. The money is in the UK, in normal bank savings accounts, as I have already said in other replies. The issue is, the only issue, that when I have been asked for 'proof of source of funds' I haven't been able to go back to when a percentage of my savings was originally earned in terms of documents etc. 

fistfulofsteel

user1977 said:

fistfulofsteel said:

I'm considering DIY conveyancing to get around this issue. 

How would that get around it? The seller's solicitor is likely to be even more wary about accepting funds from an unrepresented buyer - if they agree to deal with it at all, you're still going to have to demonstrate where the money came from.

I know the seller personally and he's not using a solicitor.

I get the impression this problem arises more often for people who don't have income and are living on savings accumulated years/decades ago, rather than for people actively adding to them? My income hasn't been high enough in the last ten years to add much to savings, but they have grown significantly during that time due to being moved frequently to higher interest accounts. It would have been helpful to been given a warning, either on sites like MSE recommending new savings products or at the point of closing each account, that I needed to keep a record.

Elliott.T123

jnorth55 said:

Herzlos said:

Elliott.T123 said:

Every house I have ever bought, every house my parents have bought, every house my in-laws have bought (using far bigger cash figures than you mentioned, one of the purchased was over £1m in cash) the "proof of source of funds" has been a simple case of, here is the bank account / accounts the money is in, it has been here for 12 months. That is all the proof that was required.

I'm convinced there must be some other issue at play we're just not catching. I don't think it was mentioned anywhere, but what country are you in? We're assuming England but it's possible you're somewhere with completely different rules and we're talking at cross purposes. 

What country is your money in? What kind of savings account?

Seriously, doesn't it show the issue that you assume there must be something to do with me. It really isn't. The money is in the UK, in normal bank savings accounts, as I have already said in other replies. The issue is, the only issue, that when I have been asked for 'proof of source of funds' I haven't been able to go back to when a percentage of my savings was originally earned in terms of documents etc. 

I think I may be onto the issue!

When you have been asked for proof of source of funds how do you respond?

Is your response "I am not able to do this" or "I don't have those records" or something along those lines?

When asked that just send the solicitor a bank statement showing the last 12 months of the funds. Do not say anything else, do not offer up any more information, just send that and await a response.

Myci85

People are giving very valid advice as to how you can get this issue sorted, including people who work in the profession, and you're ignoring these comments in favour of getting irritated by people trying to help you by figuring out what could be causing issues for you in the first place. 

No one here can create the system you are referring too, that would somehow prove beyond doubt those with legitimate funds from those with dodgy funds. Perhaps this could be something to funnel your energy into yourself? 

Alternatively, if you do just want to buy a house, take the sensible advice given, focus less on the need to prove 'source' as being the original way the money entered your accounts, but just provide the amount of bank statements your conveyancer asks for and see how you go.

EssexHebridean

artyboy said:

EssexHebridean said:

the firm I work for does mostly conveyancing, and as a result we see a fair number of folk over a year who need to be vetted for AML and proof of funds. It's INCREDIBLY rare that anything beyond 6 months bank statements to prove savings is required - even for a cash purchase Occasionally when a lender is involved they want a little more in depth info, but even then it's rarely more than an extra 6 months proof of income and additional time back on savings statements. Very occasionally something comes up where things don't add up for whatever reason, and then more questions will be asked, but it happens so rarely I honestly can't recall the last time we had that sort of issue. In the 16 years I've been here, I think I can remember two occasions when a client's own evasiveness (not saying that this is the case with the OP - purely speaking from an "on the ground" perspective) has lead to us eventually politely saying that we were not happy to continue acting. In that time I can never recall a situation where we have asked a client for "decades" of information - or indeed even "years". It simply doesn't happen in most normal circumstances. 

Solicitors are under enormous pressure these days to ensure that all AML checks are carried out and have satisfactory results - if there is anything at all that is raising red flags, it has to be looked into. 

My suggestion to the OP next time they are asked for proof of funds, is to produce 6 months statements for the account the money is held in, and say nothing more about it at all - no "trying to explain" or "adding detail" - simply the bare basics, and then to see where that leads. Sometimes, the less you say, the better the outcome.

**Puts Anorak On**

At the risk of being pedantic, PROOF of funds is the easy part, i.e. establishing that the money for the transaction is available in an account somewhere.

SOURCE of funds is the side where you have to establish an ultimate link back to a legitimate money source.

Apologies if that's more detail than needed here, but it's my professional area, and they are distinct concepts for AML checks (There's also Source of Wealth, but it doesn't really come into play for a single transaction relationship like this...)

It's a good point - in conveyancing transactions the two things tend to go hand in hand, because the source also shows the proof, as a rule. They are technically two distinct and different things though as you say.  

EssexHebridean

Elliott.T123 said:

jnorth55 said:

Herzlos said:

Elliott.T123 said:

Every house I have ever bought, every house my parents have bought, every house my in-laws have bought (using far bigger cash figures than you mentioned, one of the purchased was over £1m in cash) the "proof of source of funds" has been a simple case of, here is the bank account / accounts the money is in, it has been here for 12 months. That is all the proof that was required.

I'm convinced there must be some other issue at play we're just not catching. I don't think it was mentioned anywhere, but what country are you in? We're assuming England but it's possible you're somewhere with completely different rules and we're talking at cross purposes. 

What country is your money in? What kind of savings account?

Seriously, doesn't it show the issue that you assume there must be something to do with me. It really isn't. The money is in the UK, in normal bank savings accounts, as I have already said in other replies. The issue is, the only issue, that when I have been asked for 'proof of source of funds' I haven't been able to go back to when a percentage of my savings was originally earned in terms of documents etc. 

I think I may be onto the issue!

When you have been asked for proof of source of funds how do you respond?

Is your response "I am not able to do this" or "I don't have those records" or something along those lines?

When asked that just send the solicitor a bank statement showing the last 12 months of the funds. Do not say anything else, do not offer up any more information, just send that and await a response.

What I suggested several posts back then. As I said then, sometimes, saying and doing less actually gets you the desired result.  It would make perfect sense that this is the issue, allowing that I (And it seems many others here too) have NEVER heard of a solicitor or conveyancer asking for documentation going back decades on this. Indeed, the only situation in which I can begin to think someone might is in a scenario where they really weren't comfortable to act for an individual, but also didn't want to say as much. Ie, a "soft" way of offloading a client. 

Grumpy_chap

jnorth55 said:

. The money is in the UK, in normal bank savings accounts, as I have already said in other replies. The issue is, the only issue, that when I have been asked for 'proof of source of funds' I haven't been able to go back to when a percentage of my savings was originally earned in terms of documents etc. 

Are you actually being asked for that?

The proof of funds is all about the money being legit and not the proceeds of crime.

If it has been in your account for several years, that is clean money.

If you just got the money by selling the French Crown Jewels, that is problem.

SiliconChip

jnorth55 said:

Herzlos said:

Elliott.T123 said:

Every house I have ever bought, every house my parents have bought, every house my in-laws have bought (using far bigger cash figures than you mentioned, one of the purchased was over £1m in cash) the "proof of source of funds" has been a simple case of, here is the bank account / accounts the money is in, it has been here for 12 months. That is all the proof that was required.

I'm convinced there must be some other issue at play we're just not catching. I don't think it was mentioned anywhere, but what country are you in? We're assuming England but it's possible you're somewhere with completely different rules and we're talking at cross purposes. 

What country is your money in? What kind of savings account?

Seriously, doesn't it show the issue that you assume there must be something to do with me. It really isn't. The money is in the UK, in normal bank savings accounts, as I have already said in other replies. The issue is, the only issue, that when I have been asked for 'proof of source of funds' I haven't been able to go back to when a percentage of my savings was originally earned in terms of documents etc. 

You haven't really answered the question that Herzlos asked, while the money is in the UK it may be relevant which part of the UK you live in (or perhaps more pertinently which part you are trying to buy in), the legal system in Scotland has significant differences to that in England and solicitors there operate in a different way to those in England.