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AIBU?

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Original poster

...to be so upset but mostly angry that I've been turned down for a mortgage

159 replies

thebiggestloserinthenorth · 26/08/2021 15:35

Hi all... Single mum here. I've been saving for years to try and get some money for a deposit as so much bad luck with renting. Was gifted some money by a relative.
Finally got a 'yes' decision in principle from a lender through a mortgage advisor (shared ownership) and so happy as just want stability for me and my child. Today I heard that they've now refused the mortgage application based on some of the deposit being gifted?
I have zero debts, a decent job and am so upset about this.
How are you meant to get on the properly ladder if you don't get gifted money?
Feel so deflated now.
AIBU to feel so angry... also have shelled out nearly £1000 in fees (holding fee & mortgage advisor fee..)
😢

OP posts:
Wilmaa · 26/08/2021 15:37

I was gifted money for deposit and they just had to write a letter stating it was a gift and they didn't want it back.
Did they ask you to do this?

NoSquirrels · 26/08/2021 15:39

It’s such a common scenario that usually it just means the person who gifted you the money has to sign a form that says ‘This is a gift and does not need to be repaid.’

It’s only an issue if it’s really a loan, not a gift with no strings attached.

Outnumbered99 · 26/08/2021 15:39

So much wrong with this... I would challenge it as far as you can, speak to another broker (there is no need to pay a fee anything like £1000 btw). Usually a letter confirming the deposit is a gift (assuming its from an immediate family member) will suffice?

LakeShoreD · 26/08/2021 15:39

Are you sure that was the only reason? And it didn’t just need clarification about it being a gift (not a loan)? Just about everyone I know that has bought has been gifted some or all of the money for a deposit.

cocopidge · 26/08/2021 15:40

I'm sorry. It is really disheartening.Flowers

However I am surprised it was turned down due to the gifted deposit. My deposit was almost entirely gifted. Are you sure your income is enough to cover the rest of the amount? And that you haven't got any marks or outstanding debts on your credit file?

Going forward, find a broker that either doesn't charge fees or only charges fees on successful completion of the purchase.

Good luck!

Original poster
thebiggestloserinthenorth · 26/08/2021 15:40

They wrote a letter that clearly stated they didn't want the money back
This was accepted by the mortgage advisor and submitted to the lender.

OP posts:
Fourandtwentymilliondoors · 26/08/2021 15:41

Which lender is it? I’m surprised they won’t accept a gifted deposit - in those circumstances a letter from the relative confirming it’s a gift and non repayable should be sufficient.

However, who is the relative? Lenders usually want them to be an immediate relative (parent, sibling, grandparent, child, for example) so if they’re a brother in law or partner that might be why it’s been declined?

Original poster
thebiggestloserinthenorth · 26/08/2021 15:42

@Fourandtwentymilliondoors money gifted by my dad. Letter written and submitted stating it's a gift. There was a form but he couldn't complete the word documents so wrote it out identical to the form.

OP posts:
Original poster
thebiggestloserinthenorth · 26/08/2021 15:44

@cocopidge affordability fine and no debts or poor credit history - it's all so upsetting.

OP posts:
Forgottenflush · 26/08/2021 15:44

It possibly is as simple as it cannot be accepted unless written on the correct form. Also can you try other lenders, maybe via a broker? Lots don't charge as they get commission from the lenders.

Fourandtwentymilliondoors · 26/08/2021 15:45

Well then that doesn’t make any sense, unless it’s a lender which has recently changed policy about gifted deposits.

But even if that’s the case, if your application was submitted before the policy change they should honour it.

Which lender is it?

MaMelon · 26/08/2021 15:45

I gifted a sum of money to DS a few months ago and just had to complete the form the bank sent confirming I had no stake in the house and that the money wasn’t to be repaid. I wonder if it’s something as simple as your Dad not completing the official form?

Leftbutcameback · 26/08/2021 15:45

That is so upsetting and doesn’t seem right at all. However also a bit worried about the amount you paid a broker, they sound like they’ve really let you down

MaMelon · 26/08/2021 15:46

DS is with RBS if that makes a difference

Disfordarkchocolate · 26/08/2021 15:47

Is there a reason you Dad couldn't complete the official form? That could be the reason so it's worth a query to the mortgage provider.

Original poster
thebiggestloserinthenorth · 26/08/2021 15:48

@Leftbutcameback £500 holding deposit for the flat & £250 payment to the mortgage advisor. I'm new to all this. Was told that once decision in principle made, very rare that decision overturned by lender. Then it was overturned the next day.

OP posts:
Outnumbered99 · 26/08/2021 15:48

I wonder if it could be because there is something at the lender that says gifted deposit form not returned. It could be something as bonkers as that, but your broker should be speaking to their BDM and pushing the lender- it is not ok to let people down like this, obviously its the lenders prerogative to decline the case at any stage but i would have thought in your position there would be other lenders to use too. Something doesn't sound right to me.

Wilmaa · 26/08/2021 15:50

Which lender was it with?
I would ring them first, find out what's gone on and if there's anything you can do, as simple as your dad completing the form on their paper.

HarrietsChariot · 26/08/2021 15:50

Are there any reasons why they might think he will need to go into care or sell his home to clear debts? If he gifts you the money and then he goes bankrupt or has to go into care, there are circumstances where you could be forced to pay the money back (regardless of him not wanting you to).

Not that this helps you, but it might explain a possible reason for the rejection.

Kyokyo · 26/08/2021 15:52

How much of your deposit is gifted ? Some lenders have a maximum amount for how much of your deposit is a gift.

For example, some lenders won't accept you if you deposit is 100% a gift as it means you haven't saved any money yourself which could indicate that you are not good with finances or do not have enough desposible income to maintain a property. Some have a maximum amount - for example 75% of your deposit must be your own savings and only 25% can be made up from a gift.

I would reccommend that you try some other lenders and get a mortgage broker that doesnt charge you a fee as £1000 is a lot of money

Polmuggle · 26/08/2021 15:54

OP have you seen the response from the bank stating this is why? Or just been told so by your mortgage advisor? A mortgage advisor should be sorting this out for you, that's what they're there for. Also, most mortgage advisors are free, so given you are paying this one I'd make sure they do this kind of heavy lifting!

Blitzes · 26/08/2021 15:55

I would find a new mortgage adviser. Lost out there don’t charge a fee at all or don’t charge until your mortgage has been secured.

Something sounds off about it unless it’s because your deposit was 100% gifted then I can’t see why they’d reject it. Nearly everyone I know who owns a home got given money and just had to fill in the
Form from
The bank declared it as a gift with no repayments required by the person who gifted and signed by that person

What lender?

SunbathingDragon · 26/08/2021 15:55

I’m sorry. I have heard of this before as something to do with you not being able to show you can save your own deposit. Have you considered going to a broker and seeing if they can find you a lender who will accept you with a gifted deposit?

Original poster
thebiggestloserinthenorth · 26/08/2021 15:58

Spoke to mortgage adviser - lender didn't even know that the person gifting wrote a letter & didn't fill the form so not that.
They are talking to another lender about a mortgage now.
Just want to be able to have some stability... I'm feel like such a flippin' failure.

OP posts:
Original poster
thebiggestloserinthenorth · 26/08/2021 15:59

Deposit 70% gifted....

OP posts: