Your home may be repossessed if you do not keep up repayments on a mortgage.
There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £149 to £750 and this will be discussed and agreed with you at the earliest opportunity.
With property prices high relative to incomes, many buyers — particularly first-time buyers — receive help from family to fund their deposit. A gifted deposit could make buying a home possible, but there are things both the giver and the buyer need to understand. Here’s a guide.
What a gifted deposit is
A gifted deposit is money given to you — usually by parents or close family — to put towards buying a property, with no expectation of repayment. This is an important distinction: for a lender, a genuine gift is very different from a loan. If the money must be repaid, it affects your affordability and how the lender views the application.
How lenders treat gifted deposits
Most lenders accept gifted deposits, but they’ll want confirmation of a few things. Typically, the person giving the gift will need to confirm in writing that it’s a genuine gift with no repayment expected and that they’ll have no stake in the property. Lenders also carry out checks on the source of the funds as part of anti-money-laundering requirements, so being able to evidence where the money came from matters.
Who can gift a deposit
Rules on who can gift vary between lenders. Most readily accept gifts from parents; some also accept gifts from grandparents, siblings or other relatives; and a few are more flexible still. Because criteria differ, a comprehensive panel, with many High Street and specialist lenders, helps if your situation is less straightforward.
Considerations for the family member
Anyone gifting a deposit should understand it’s a genuine gift they won’t get back, and may wish to consider the wider implications for their own circumstances. Questions about the tax or estate-planning aspects of gifting money are best directed to a qualified accountant or financial adviser who can advise on the specifics.
Making it straightforward
A gifted deposit is a wonderful way for families to help each other onto the ladder, and with the paperwork handled properly it’s a smooth process. We can guide you through what lenders need and help find one comfortable with your circumstances.
