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Gifted Deposit

Last post Thu, Jan 05 2012, 1:43 PM by garethcoombes. 4 replies.
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  •  Thu, Jan 05 2012, 1:43 PM

    Re: Gifted Deposit

    Thanks for the advice! Its just frustrating to have lost the last 2 1/2 months for nothing.

    Have you found the Abbey (Santander) to take a long time over any and every correspondance?
    • Post Points: 5
  •  Thu, Jan 05 2012, 12:35 PM

    Re: Gifted Deposit

    Gifting equity is fine and is a common way for parents to pass on their own family home to their children, it is normally evidenced by a letter from the parents to the lender stating what they are dong and that the gift of equity is a none repayable loan.

    I would suggest that there is a further problem to this that you are not aware about.

    Abbey (Santander) do accept gifted deposits. I have done many FTB mortgages with them and am currently doing an FTB mortgage wth a gifted deposit with them for a friend of mine and know that this is not an issue as standard.

    I would suggest that you contact Santander and ask for a detailed answer to the problem as it may even be a legal problem with the property thats preventing you from buying it. If you have received a formal mortgage offer then it means that Abbey have at some point accepted the gifted deposit as this will be done at underwriting stage which is before the house is even valued and the formal mortgage offer is issued to you and so it must have been acceptable to reach this point. To have the offer retracted means that it has likely either had a head office reveiw and declined on something in the application or there has been a legal aspect of the sale that the solicitor is not happy about and has highlighted to Abbey to change their minds.

    I wasn't aware that HSBC did not use gifted deposits (they do not use the professional intermediary market for business) so its not something I would come across easily.

    While it has been a blow to your purchase process most other lenders will allow this type of deposit and so if you cannot proceed any further with Abbey then you will have many other choices even from the high street

    • Post Points: 20
  •  Thu, Jan 05 2012, 9:23 AM

    Re: Gifted Deposit

    They are not giving us £50k in cash, but in equity. Is that an issue?

    We have already agreed to an indemnity policy protecting the Abbey against bankruptcy claims in the next 7 years against my wife's parents, so I'm not sure exactly what their problem is.

    What I do know is that we applied for this mortgage 19th October and it took until 14th December to receive an offer which was then withdrawn 2 days later and neither my mortgage broker or solicitor can work out why it has taken so long, why they can't understand the application and they have never experienced such poor service.

    Our solicitor has written to them confirming the deposit is a non returnable gift and they have seen the prepared contract detailing exactly what is changing hands through the solicitor's client account.

    The Abbey have told me that despite the fact they have valued the house at £220k, as we are only transferring £170k to the vendor then that is what they view the purchase price to be. Despite the fact that the land transfer documents will state £220k purchase, and the contracts exchanged by both parties, and we will pay £2,200 stamp duty to HMRC.

    The HSBC told me they won't look at any current applications with gifted deposits.
    • Post Points: 20
  •  Thu, Jan 05 2012, 8:22 AM

    Re: Gifted Deposit

    As far as I am aware, gidted deposits are excepted by all lenders and so it is not the act of the gift that is causing the issue here but it could be something connected with the gift. The lender has the right to know/understand require evidence of the gift and this could be by seeing bank statements with the deposit and the build up or a good explanatiomn of where it came from or it could be something as simple as a letter from the parents stating that it is a gift and non returnable sum of money.

    In order to give you a better answer I would need to know exactly what part of the deposit is outside of the lending criteria or why they do not like your particular gifted deposit as a gifted deposit is normally definitely 100% acceptable to Santander (Abbey)

    • Post Points: 20
  •  Tue, Jan 03 2012, 11:19 AM

    Gifted Deposit

    My wife and I are buying a house from her parents but have been turned down a mortgage at the last minute by the Abbey as we 'fall outside of their lending criteria'.

    The house has been valued at £220k we need to borrow £187k (85% LTV). Her parents want to gift us £50k so we will transfer £170k to them upon completion. This 'gifted deposit' seems to be the stumbling block for the Abbey. I've checked with HSBC who also won't consider an application with gifted deposit.

    Can anyone suggest another lender?

    • Post Points: 20