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Original poster

Is this a gifted deposit?

31 replies

booksandnooks · 08/05/2021 20:35

First time buyers here.
We have saved up the deposit on our own, saved up enough for fees too. Unexpected expenses in regards to surveys and other things (not really sure what to be honest) so we borrowed a couple of grand from a friend to help with the extra expenses and for the overlap of rent and mortgage and moving fees. Just really to give us a buffer.
This money is a loan not a gift however it is not for the deposit, we had the money for the deposit in our banks when we made the offer on the house.

We are now filling our paperwork and have a Gifted Deposit Declaration form. Does this money count as a gifted deposit? Do we need to clarify on the form or do we even need to bother with this form?

We have already sunk a couple of grand and would not a get a chance to buy again as since we have had our offer accepted we have been priced out of the area. within a matter of months.

Any advice would be appreciated, solicitor isn't open until Monday and I just can't sit around all weekend worrying.

OP posts:
AmazingGrapes · 08/05/2021 20:40

If it’s not needed for any payments relating to the actual house itself or stamp duty I would keep quiet about it. It will just complicate things.

The gifted deposit form makes you sign that it’s a loan - not a gift - and the person giving the gift also has to sign that. Your friend might feel extremely freaked out by being asked to sign such a document!

AmazingGrapes · 08/05/2021 20:40

Sorry I mean a gift - not a loan

Original poster
booksandnooks · 08/05/2021 20:42

Oh also the loan has already been half spent on the survey and something else solicitor wise (again not sure what, I think we needed another survey because of the type of building, no damage.) we have the whole deposit in a savings account separate to our regular account so it is obvious that the money is for different things.

OP posts:
Original poster
booksandnooks · 08/05/2021 20:43

@AmazingGrapes
right well they have asked to see our bank statements and we have already told them about it (stupid probably) because someone just put 2k in our bank. looks rather fishy in comparison to wages etc.

OP posts:
Astronaut8 · 08/05/2021 20:44

I had to sign one as got deposit from parents.
I wouldn’t do it for money from a friend for help for fees etc.

Astronaut8 · 08/05/2021 20:45

Is bank statement not for proof of deposit?

Original poster
booksandnooks · 08/05/2021 20:46

Friend has already signed but stated it is repayable in 2 years.

We already had a house purchase interrupted due to covid and had to pay and extra few thousand because of house price increases. this is likely our last chance because as much as we save we just can't keep up with the growing prices.
Average is going up by about 5k every year and we can only save 4k. (not real but about the same)

OP posts:
Original poster
booksandnooks · 08/05/2021 20:50

We have explained the situation to the solicitor and they said it was fine no problem. also to mortgage broker.
but then they sent us an email asking for the friend to sign the gifted deposit even though they previously said as its not for deposit its okay

not really sure what to do. we never lied or anything. Explained it was a loan for the extra survey from the second they told us we needed one. at first we couldn't afford the extra survey because it was almost an extra 1000 added on but friend said 'I will lend it to you'
we asked if this was okay before we even borrowed the money

OP posts:
TakeYourFinalPosition · 08/05/2021 20:50

I’d wait to talk to your solicitor, given the importance of this transaction for you, and the fact that banks can be very fussy around loans relating to house buying.

They’re going to find out about it when you show your statements, so your solicitor needs to advise on how to present it so that it doesn't have an impact. I’d imagine the fact that it isn’t part of your deposit helps, but as it has been used for the house buying process, it might be considered relevant if you don’t present it correctly.

Astronaut8 · 08/05/2021 20:52

If they’ve asked you to sign it after previously saying no I would think it needs done

NoSquirrels · 08/05/2021 20:53

You know your friend - would they freak out or would they just sign it anyway secure in the knowledge you will pay back as agreed?

Original poster
booksandnooks · 08/05/2021 21:00

@NoSquirrels
I don't know. I think we should ask him to just say its gifted but dh doesn't want to.
I suppose we wouldn't have to pay it back if he said it was a gift so thats a risk for him. we would obviously pay him back and are going to give him an extra few hundred on top as a thank you but now I'm wishing they had said no so we didn't waste any more money on the survey if we aren't going to get it anyway.
we have lost so much trying to buy
we have the money and secure job. save most money except living expenses
Its so hard I feel so sad. especially as my parents managed to buy with no deposit and they borrowed extra for the sol fees and a new kitchen... It feels so unfair

OP posts:
Original poster
booksandnooks · 08/05/2021 21:02

@astronaut8
I know
I just wish I had known before so we could have taken a smaller hit and tried again. Now it is too late and we have spent 3x the amount of money we thought. I know buying houses is expensive but we just keep getting bad luck piled onto of bad luck.

OP posts:
Astronaut8 · 08/05/2021 21:17

I know your worrying but I don’t think there’s anything to worry about.
You both sign it and that’s it.
When I done it for deposit my mum and myself had to sign and that was it.

Original poster
booksandnooks · 09/05/2021 10:17

@astronaut8
was that money a gift or a loan?
apparently our lenders are very strict and I am actually freaking out Blush

OP posts:
prh47bridge · 09/05/2021 10:27

The key word is "gifted". Your friend has not gifted you the money. They have loaned it to you and expect to be repaid. It is therefore not a gifted deposit.

Astronaut8 · 09/05/2021 10:28

It was a gift, but yours is technically a gift even though your paying back, it’s not a loan like with a bank.

prh47bridge · 09/05/2021 11:14

Having said it is a loan, your lender would be happier if it was a gift. If it is a loan, your friend could, in theory, try to claim a legal right over the property if you don't pay them back. You are more likely to have problems with the lender if you insist it is a loan.

Original poster
booksandnooks · 09/05/2021 13:08

Taking this all on board and armed with questions to the solicitor on how to best present this money.
We definitely would have had to have pulled out at the second survey because we just can't make money fast enough to cover an extra thousand pounds in one go.
I am a bit pissed off to be honest because we stressed over and over to the sol that this was not a gift and not part of the deposit but they said it was fine and wouldn't be considered or questioned.

I feel as though they said it would be okay to get us to carry on and borrow the money for the extra services and now I feel a bit like I've been lied to.

We asked originally if we should budget more for the survey as it is a non standard construction building and they said they have dealt with all the houses in the same road and they were fine, only to be told (once its too late and money is already invested) that it'll cost the extra they said definitely wouldn't be needed.

to be honest they seem to know piss all

OP posts:
NoSquirrels · 10/05/2021 06:49

It would be best if you could just get your friend to sign the paperwork. If they still have the paperwork you guys signed between you as a loan agreement, that would still cover them to reclaim from you in small claims court etc. From your friends’ POV they don’t want a charge over your house, just the money back. And from your POV you just want to pay the money back as agreed. And from your bank’s POV they don’t want another claim on the house. So have an honest chat with them.

Otherwise I’d take out a small loan, pay your friend back and accept whatever hit that is on the credit check for the mortgage. For £2K it should be minimal.

WaterBottle123 · 10/05/2021 06:57

I loaned my sister a deposit and signed the form saying it was a gift to avoid hassle for her. It's not like private loans are enforceable whether you've signed things or not. If I was your friend I'd just sign it.

Mumdiva99 · 10/05/2021 06:57

You have to present this money as a gift. Of course you will in reality pay your friend back. But from a bank perspective they want to be the only person with a claim on the property.

You need to talk to your friend and ask them to sign the form.

Tbh.....I would never lend a friend this much only if I didn't 100% trust them, have the money to lose if they couldn't pay it back, love them and want the best for them. Talk to your friend.

NoSquirrels · 10/05/2021 06:59

Tbh.....I would never lend a friend this much only if I didn't 100% trust them, have the money to lose if they couldn't pay it back, love them and want the best for them. Talk to your friend.

This is also how I’d feel as a friend. I really think being honest with friend about dilemma is best - you need to ask them if they’d be prepared to sign it just to avoid any hassle.

Original poster
booksandnooks · 10/05/2021 09:48

Thank you all so much, we have spoke to solicitors and they said it's fine as long as we have the deposit in a separate account. It is all in an ISA anyway.
So thats that sorted.
thanks so much you made my long worrying weekend that much more bareable!

OP posts:
Mumdiva99 · 10/05/2021 10:43

Good luck with it all. It is a stressful time but will be worth it in the end.

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