Conveyancer Rachael Reay gives her top 4 tips for buying a house using a gifted deposit.
Homebuyers (especially first time buyers) are having to rely more and more on relatives assisting with their house purchase deposit.
Quite often, first time buyers have to turn to the ‘bank of mum and dad’ to help them get onto the property ladder with a gifted deposit.
If you are using a gifted deposit in your house purchase, please read our handy tips to avoid any delays in your transaction:
- If you are obtaining mortgage finance with a gifted deposit make the broker/lender aware of the gift in the application process.
- Make your conveyancer aware of the gifted deposit as soon as possible as we are required to carry out checks to make sure the funds comply with Money Laundering Regulations. We also have to make your mortgage lender aware of the gifted deposit to make sure they are happy with the situation so the sooner we do this the better.
- Provide evidence that the money is a gift and not a loan. This is because we have to make sure that the person gifting the money will not have any legal interest in the property. We also have to confirm to the mortgage lender that the money is a gift and the relative does not want repaid.
- Let the person gifting the deposit know that we will require evidence of their identity together with evidence of their funds, for example a bank statement showing the funds held in their account. Again, this is to comply with the Money Laundering Regulations.
Once we are aware of the gift, we will write to the person gifting the money to advise them of our requirements. At this stage, they may want to obtain their own financial or legal advice to find out the implications of them gifting the money to you.
If you have any questions on gifted deposits please contact Rachael Reay on firstname.lastname@example.org.
About the author
Published: Tuesday 18th April 2017
Categorised: Residential Conveyancing