Can Someone Gift Me A Deposit To Buy A House?
Posted on 20th April 2020
Our Property Solicitors in Lancaster wish to stress that new buyers don’t need to worry about being given a gift of money however there are some important steps you must take in order for your transaction to go smoothly:
- Your local Solicitor needs to know about the gift of money. There are certain legal checks which will have to be carried out such as enquiries on the source of funds to ensure the anti-money laundering requirements are met. These such checks must be carried out in every transaction.
- Tell your mortgage advisor from the outset that you are buying with the help of a gift, your mortgage lender will have to take this into account before providing you with a mortgage offer.
- Speak to the person who is gifting you the money so that they understand what will be required of them. They must be aware that the Solicitor will need to see bank statements and also evidence of their identification. You must also clarify whether the money is to be a pure gift or a private loan.
- Once a decision has been made as to whether there is to be a gift of a loan of monies your Solicitor will need to establish whether the person providing the money is expecting to hold any legal interest in the property.
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Your Solicitor will advise the person providing the money that they should seek independent legal advice to ensure that they are aware of the implications of giving money rather than loaning money. That said it is usually for the person providing the money to make a decision as to whether they wish to seek the independent legal advice unless the Mortgage Lender insists upon it as a requirement.
Your Property Law Solicitor in Preston will also ask your giftor to complete a declaration to state that they have no interest in the property, that they will not live at the property and that they do not intend to claim an interest in the property at a later date. The reason for this is because the Mortgage Lender need to know that their interest is secure. The Lender won’t want to risk a challenge of ownership of the property in the event of repossession.
The gift of money cannot simply be transferred to the home buyers account months or weeks before the transaction has begun as this will come to light during the conveyancing transaction. Evidence will be required an ultimately this will delay the process.
For some people this process of checking bank statements can feel intrusive however if this process must be followed failure to do so will have serious legal consequences.
For a property transaction to run smoothly you need our expert residential conveyancing Solicitors who can be contacted via property@mglegal.co.uk or by calling 01995 602 129 allowing you to focus on enjoying your new home as quickly as possible.
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