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

[thebiggestloserinthenorth]

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..)
😢

Also - personally I would avoid new builds. If the builders have fucked up you will have to pay for it.

This pees me off. I hate that buulders push you to mortgage brokers.

Op as you are looking at shared ownership it could be the lender is already overexposed in the area, or it could be that they are shit and didn't research whether the lender will accept a gifted deposit with shared ownership.

What people on this thread don't realise is that lenders make their own rules. Some do shared ownership, some don't. Some accept gifted deposit, some don't. Some require shared ownership owners to be able to staircase ownership to 100%, some don't. Some accept other income than base salary, some don't. A good mortgage adviser will know where and how to find that information and recommend accordingly.

I used John Charcol when I arranged a mortgage and didn't have to pay anything till it went through. I think it's worth knowing before you get into this that there are a huge range of financial products on the market and advisors and brokers vary in quality.

Hope you can resolve this, OP. Have you researched the cladding issue thoroughly, by the way? (I think you said it's a flat?)

As this is a shared ownership mortgage, you do not have the same choice of lenders as on the open market; however, it shouldn’t make a difference to this issue.

Which HA is this with? It might be good to make them aware, as you will not be the only person this is happening to, and the HA may want to know about it.

From Peabody’s website:

Source of deposit

You will need to evidence your deposit to the mortgage lender by providing a statement showing the source. Where money has been built up in your current account, three months bank statements should be sufficient. However, where money has been transferred to your bank account from a separate source e.g. an investment, you will need to provide evidence of the original source.

It is now very common for buyers to receive gifts from family to help with their home purchase. Most lenders will accept gifts but will insist on the source being verified. Some sponsor’s may be uncomfortable with disclosing their personal and financial information, so it’s important that you discuss this with them in advance.

Sponsor's will be required to:

• Sign a letter stating that the gift is unconditional, not repayable and does not entitle them to any interest in the property.
• Proof of ID e.g. certified copy passport or driving license (photo version)
• Proof of address e.g. certified copy of a utility bill/bank statement
• Evidence the source e.g. 3 three months bank statements (or certified copies)

Please note that gifts from overseas may be subject to a higher level of scrutiny and in some situations may not be accepted - but please speak to your mortgage advisor who can advise on an individual case basis.

Does your dad live in the UK, OP? Was his ID etc requested?

[quote Talia99]@KateonSkates, because they ask and lying is mortgage fraud and carries a prison sentence.[/quote]
But surely it's hers if it's in her bank account? Do they ask how it got there? Is it a money laundering thing?

Genuine questions as it's about 30 years since I got my first mortgage.

We have gifted all the deposit to my daughter for a shared ownership property. Nationwide turned her down and the financial advisor just found another one. No idea why it was rejected but the advisor didn't seem too concerned. I'm sure this will work out but must be very stressful.

@Wilmaa

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?

We had to do this when we gifted part of a family member’s deposit It’s to make sure that it is a gift and will never have to be repaid, as that would affect the affordability assessment.

All of my deposit was gifted and all my mum had to do was write a letter saying it was gifted and that she wouldn't be claiming it back.

I’d question this or seek a different mortgage advisor! We were gifted £10,000 to our mortgage and it was fine, not one question asked.

I wasn’t gifted money to get on the property ladder.

I would question it, usually if gifted you just need a letter stating so. So I’ve been told anyway.

That aside:
Why don't you cut the adviser out and find a better deal yourself where NO money is handed over to anyone, until you start the mortgage payments.

Years ago when I 'nearly' got a mortgage through an adviser, it was 1.5 % higher than the one I found for myself at the Halifax!!

Why didn't the adviser tell me about the Halifax - BECAUSE his commission would have been lower!!

We sold and bought recently and we were told that banks have really tightened up rules on lending to those with gifted deposits (when we bought our first house it wasn’t an issue at all, we just needed a letter, as PPs have said). But now apparently the banks want to see that you have saved a certain percentage of the deposit yourself, only so much of it is ‘allowed’ to be gifted. I’m sure the amount must vary from lender to lender so fingers crossed you find one that is happy with the percentages you have. Be proud of yourself, you’re doing really great. This isn’t about you but just the banks being scared at the moment with the whole coronavirus thing. You are just unlucky with timing, absolutely not a failure.

@KateonSkates its a money laundering thing, theyll ask for several months of slips on all bank accounts, plus a statement showing the gift going in and a letter / form signed explaining its a gift not to be repaid.

There are really great mortgage advisors for free. They take their cut via the mortgage companies I believe and not you. To name two:

L&C Mortgages
Threshold Mortgage Advice

The advisor should be asking more questions on your behalf, especially if you're paying them. It's likely to be the form declaring the money was a gift, mortgage providers are very particular about this stuff. Otherwise, can you ask to see the application? It's possible it's been filled out wrong.

We bought a shared ownership flat 15 years ago, my Dad paid 100% of the deposit and no one asked us anything about where the money came from?

Should have said we also used a private mortgage broker who got us a great deal, only thing I will say is don't add the fees on to your mortgage, we did that not realising that we are paying interest on that for years!

What your dad didn’t fill in the correct forms?

@Excelthetube not about the forms, apparently solely the fact that a higher percentage was gifted...

When we bought our house, the majority of our deposit was a gift from the in-laws. They just wrote a letter stating this and it was dated and witnessed, they didn't fill out a form for it. Have things changed as this was only 5 years ago? I really hope you get some good news soon @thebiggestloserinthenorth

Weird
Very weird

OP, if you haven't already, try Skipton directly. They're a really lovely building society (in my experience) and their underwriters are decent folk with common sense. They do accept gifted deposits, check skiptons intermediary website for all the criteria.

Thanks @TheDaydreamBelievers

Don't say it is an inheritance as they will want proof of that too we are remortgaging as our fixed rate is up also paying off a chunk and reducing the term due to inheriting some money from my Grandmother solicitors wanted evidence of where the money had come from so provided the correspondence I had from the solicitor.

I used Habito as an online broker to find our last mortgage. Would recommend.

The first time our mortgage advisor was useless, didn’t understand some legal aspects of our situation, asked us to commit fraud (he didn’t obviously realise it was fraud due to being rubbish at his job) and didn’t find us a good deal!

Got a mortgage through HSBC who are one of the only ones who are happy to allow one person to bring only a deposit and not be paying the mortgage the other person to be solely paying the mortgage when buying together. So wonder if they might be a good bet for the shared ownership situation too.

Just use the correct bloody form!