Gift declaration for mortgage?

[doginthepond]

If someone gifts you a large sum of money for a house deposit, I understand they need to give you a letter declaring this.

Do they do it at the point at which they transfer the money (as this is usually well before actually buying a house as it's all factored into mortgage offers/price ranges for house viewings etc)

OR

At the point at which you use that money to put down a deposit on a house you have picked (as this figure might be different i.e. You might keep 10K back for doing the house up etc)

Thanks in advance!

Bump

You will probably need that letter for the bank in order to get mortgage approval. So that will likely be before you are ready to put down a deposit.

Most mortgage providers actually have their own forms for this, so I wouldn't fret too much.

Make sure you speak to a whole of market mortgage broker and they'll tell you exactly what is needed and when

Thanks - when you say the mortgage company have their own forms, do you mean they ask for that to be filled in at the point of actually buying the house? Meaning a signed declaration of 'gift' (which we already have) needs to be replaced by a form at the point of buying?

My mil was asked to confirm this was a gift by writing a letter which was to detail her name the bank account the money was coming from our names the bank account money would be sent to. She stipulated this was a gift quite clearly and was also asked to confirm she did not want this money back/had no stake in the property. This was sent to our lawyers who sent it on to the bank when asked. But ours moved quote quickly from seeing a house we wanted/ getting the money transfered and buying the house was probably just a few weeks. Couldn't hurt to call your mortgage provider and ask when they would expect this

We did this recently. We needed the form from the building society signing at the point of applying for the mortgage and we needed another letter later for the solicitors.

Hmmm. Not sure what we'd do.

We've got the deposit gift already sitting in our account and a letter saying it's a gift etc.

We won't be looking for a house until December, possibly the new year for various reasons and the people who gifted the money will be living abroad by then and unable to sign any forms after next month.

Will this be a problem do you think?

For ours we had to provide letters both for our solicitor (money laundering) and bank for the mortgage.

Both had their own requirements- and in both cases it was well after the money had actually been given to us. For the solicitor they wanted detail on where the money had come from savings from earnings). The bank wanted ONLY to know about the money we've were using for the house so on their instructions we declared less than we were being given.

With the bank it took two attempts for them to be satisfied with the letter as they were very specific about the required wording.

Our gifters also had to go and do an ID check with our solicitor in person, again because of anti money laundering regs.

So yes if they had been overseas that would have been problematic. We could have got past it though, they would have needed to use an accepted local solicitor to verify ID for our solicitor, and then done all the letters by post/email.

Our solicitor letter was during the conveyancing process and our mortgage letter was not long after we'd applied for the mortgage, so both were well before we actually exchanged or completed.

The form you will get from the conveyancer will ask if any of the money is a gift and if the person who gifted the money will have any stake in the property.

Why would living abroad stop them from signing paperwork?

Where exactly are they moving to without a postal service?!

Our gifters also had to go and do an ID check with our solicitor in person, again because of anti money laundering regs.

You don't have to do it in person.

I had a bit of a complicated one (technically my husband gifted me the money but it was my money in the first place... long story) but my solicitor got us to prepare the gift letter at the same time I applied for the mortgage. It went along with the documents to prove my income etc as this money was my deposit.

Sorry I meant to add - your solicitor will keep you right on all this, as will the bank/broker when you apply for the mortgage. Just let everyone know that you are using gifted money at the start so they know, but don't worry too much about it

SAM Conveyancing's website is excellent for Gifted Deposit advice and they offer an excellent template you can use.

Basically you fill in the letter, sign it and with witnesses, then you're good to go as long as you can prove that the source of your funds is legitimate.

Here's a link to a great article to start you off - www.samconveyancing.co.uk/news/conveyancing/gifted-deposit-3-things-you-must-do-when-gifting-a-deposit-136