House Move - Gifted Deposit
Discussion
I'm in the process of buying a house.
My parents want to give me £20K to ease the pain.
What is the best way to do this?
Can I just accept it into my own bank account and add it to my own cash deposit for the house purchase? Or do I have to declare it as a gift?
My solicitors have said there is no charge for a gifted deposit, but would need a letter to say that it's a gift and not to be repaid etc.
My parents want to give me £20K to ease the pain.
What is the best way to do this?
Can I just accept it into my own bank account and add it to my own cash deposit for the house purchase? Or do I have to declare it as a gift?
My solicitors have said there is no charge for a gifted deposit, but would need a letter to say that it's a gift and not to be repaid etc.
You'll need hands on the money before it's considered "yours", so yes, get them to send it over, and stash it in a high interest account. And your solicitor is quite right, they will need to write you a letter to assure the bank that it's not a loan, and there are no expectations of repayment.
Gary29 said:
I'm in the process of buying a house.
My parents want to give me £20K to ease the pain.
What is the best way to do this?
Can I just accept it into my own bank account and add it to my own cash deposit for the house purchase? Or do I have to declare it as a gift?
My solicitors have said there is no charge for a gifted deposit, but would need a letter to say that it's a gift and not to be repaid etc.
Both your mortgage lender and solicitor will need a gifted deposit letter confirming the funds and that they aren't repayable and no security over the property will be taken.My parents want to give me £20K to ease the pain.
What is the best way to do this?
Can I just accept it into my own bank account and add it to my own cash deposit for the house purchase? Or do I have to declare it as a gift?
My solicitors have said there is no charge for a gifted deposit, but would need a letter to say that it's a gift and not to be repaid etc.
Sarnie said:
Both your mortgage lender and solicitor will need a gifted deposit letter confirming the funds and that they aren't repayable and no security over the property will be taken.
Thank you.There is no problem with the above.
I only have an agreement in principle in place at the moment, and there was no requirement to declare the source of funds for the deposit, so I presume the mortgage lender only needs to know during the actual mortgage application process rather than at this early stage?
Gary29 said:
Thank you.
There is no problem with the above.
I only have an agreement in principle in place at the moment, and there was no requirement to declare the source of funds for the deposit, so I presume the mortgage lender only needs to know during the actual mortgage application process rather than at this early stage?
Yes, only required once you submit your full application.There is no problem with the above.
I only have an agreement in principle in place at the moment, and there was no requirement to declare the source of funds for the deposit, so I presume the mortgage lender only needs to know during the actual mortgage application process rather than at this early stage?
12TS said:
Who'd know if they gave it to you now? You'd just have extra funds for your deposit in your account
Because the solicitors/broker/advisor will ask and the OP would have to answer honestly. Not telling them is technically mortgage fraud. Plus, if solicitors/underwriting see a large credit coming into the bank account then it would be questioned anyway.
I tend to find that if the money has been there (in your own account and not moved about) for more than 3 months prior to application then a lender isn’t normally interested. It is then unlikely to come up as a question with anyone, most banks will not ask for more than 3 months bank statements and the solicitor will be the same unless the information is volunteered.
TTmonkey said:
You’ll need the correctly written letter, I suggest you pay a solicitor for your parents.
It seems over blown, but your mortgage application could fail without it.
Went through this recently with daughter.
No need to pay a solicitor. The mortgage broker can give you a draft of what needs to be writtenIt seems over blown, but your mortgage application could fail without it.
Went through this recently with daughter.
Addressed to the lender or the applicant. (Not to whom it may concern)
Signed by the parents
"We are providing £x as a gift, we will have no further interest in this money or the property"
Then include proof of where the money has been for the last 3 months.
TTmonkey said:
You’ll need the correctly written letter, I suggest you pay a solicitor for your parents.
It seems over blown, but your mortgage application could fail without it.
Went through this recently with daughter.
When I gifted my son the deposit , his mortgage was with Nationwide who supplied various forms to complete but all pretty painless. It seems over blown, but your mortgage application could fail without it.
Went through this recently with daughter.
Caddyshack said:
I tend to find that if the money has been there (in your own account and not moved about) for more than 3 months prior to application then a lender isn’t normally interested. It is then unlikely to come up as a question with anyone, most banks will not ask for more than 3 months bank statements and the solicitor will be the same unless the information is volunteered.
my experience too, rather than this:Sarnie said:
They will want statements that go as far back as it takes to show you accumulating the full funds, if you say you've saved it.....
Despite Sarnie's unquestionable expertise and experience here, my own differs. I haven't had to show more than 3 months statements ever, even when using chunky lumps of savings accumulated from income over multiple years as deposits/capital. PlywoodPascal said:
Despite Sarnie's unquestionable expertise and experience here, my own differs. I haven't had to show more than 3 months statements ever, even when using chunky lumps of savings accumulated from income over multiple years as deposits/capital.
It will totally depend on the details, Eg the plausibility of the deposit............someone earning £50k with a £15k deposit will face less scrutiny that some on £20k with a £150k from "savings".We had one this week where they wanted as many statements as it took to trace back the accumulation of the deposit.........which was 12 months of statements.
Sometimes they won't even ask for proof of deposit at all but it's better to be prepared for the worst case scenario.
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