What is a Gifted Deposit? | Mortgage Advice in Middlesbrough

Gifted Deposit Mortgage Advice in Middlesbrough

Very handy for First Time Buyers in Middlesbrough a gifted deposit is when a family member or friend gives you a portion of or all of the 5% deposit. In terms of gifted deposits, here are the answers to a few commonly asked questions:

Who can gift the deposit?

It tends to be “Bank of Mum and Dad” that gifts the deposit to the applicant and this is acceptable to most Lenders.  In addition, your Mortgage Broker and Lender/Solicitor will be required to see evidence of the build-up of funds and also identification.

There isn’t a maximum limit on the amount of gift you can receive. All you need to do is evidence where it has come from then the lender shouldn’t have a problem with the gift.

Can it be a loan rather than a gift?

In almost all circumstances it needs to be a gift and the donor will sign a letter to confirm the funds are non-refundable. They will not put a “charge” on the property you are buying. Be careful though, taking out a personal loan just before applying for a mortgage will probably have a downward effect on your credit score.  This could lead to a mortgage application being rejected. Also, the monthly payments for the loan will have to be taken into account by the mortgage lender for affordability.