Which banks accept gifted deposits

Home buying with a helping hand Download our app to track every step of your home buying journey. Register today. Manvers Way - Rotherham. What to do if you're using a gifted deposit to buy a house Scraping together a deposit is one of the biggest obstacles for first time buyers getting on the property ladder. What is a gifted deposit? Who can give you money for a gifted deposit? What are the rules of using a gifted deposit as a first time buyer? For this, you must include: Their name Your name The total sum given A statement that it is a gift A statement that the gift has no commercial interest Confirmation that the gift giver has no financial or commercial stake in the property Confirmation that the gift giver is financially solvent and in a position to provide the gift You need to have this letter signed by a witness too.

What happens if the gift giver dies - is inheritance tax due? My parents want to help but can't raise a deposit - what options do they have? Speak to your mortgage adviser about your gifted deposit options Using a gifted deposit can help increase your eligibility for a mortgage, reduce your mortgage term or payments thanks to a larger deposit , and help you get onto the property ladder.

Because we play by the book we want to tell you that… Your home may be repossessed if you do not keep up repayments on your mortgage.

In this situation, it would be classed as part of the estate. Gifted deposits can also pose a risk for the donor. To help protect your money, it can be sensible to ask the solicitor working on the property to draw up a declaration of trust or deed of trust. Here you can state that the money was given to your child and not to their partner or friend. In the event they split up, this will allow your child to keep ownership of the gifted funds.

A declaration of trust can also be used by those buying the property to state what will happen if they break up — though this could be affected if your child later marries the person they have bought their home with. If a gifted deposit does not suit, there are other options for parents when it comes to helping their children get on the property ladder. These include:. If they have used their own property as a guarantee for the mortgage, they also risk losing their home.

To ensure it would be there to cover any shortfall if the property had to be sold or repossessed, the funds must be left in the savings account for a set period of time. Interest is paid the money, but there is a risk that your loved one may not get all of the funds back. Joint mortgages : Another option is to apply for a joint mortgage with your child. This would make you equally liable for the repayment of the loan and affect your access to any future borrowing.

But, thanks to your combined income, you may be able to apply for a bigger mortgage or secure a cheaper interest rate. Capital gains tax could also be payable if you later sold the property. Be sure to seek independent advice and compare your options carefully.

I've been writing about personal finance issues for many years across a wide range of websites, magazines and newspapers. My role is to demystify financial products, explain people's options and help them make the most of their money. Call us. Mortgage Guides. Bad Credit Mortgages. Get Your Free Quote. Call Last reviewed on 13th July Saving for a mortgage deposit can be difficult.

A deposit that is loaned and not gifted will be a red flag for most lenders. Get Your Free Mortgage Quote. No impact to your credit score. Property Value optional home. About the author. Martin Alexander. Mortgage Advisor More Articles.

Help to Buy calculator. Self-employed mortgage calculator. Monthly mortgage calculator. Remortgage calculator. Previous article Remortgage to buy another property. But the bigger your deposit, the better off you are because:.

So even if you have saved enough for a deposit to buy your first home, you can benefit from a gifted deposit top-up. Gifted deposits are just that — gifted. The person gifting the money has no rights or legal interest in the property being purchased. If parents are considering ways to help their children get on the property ladder, a gifted deposit can be the easiest way. Use the online mortgage finder or speak to an advisor today. Most mortgage lenders prefer it if the person gifting you the money is an immediate relative, such as a parent, grandparent or sibling.

You can also receive a gifted deposit from a partner. But more distant relatives such as aunts and uncles, or friends, may not be allowed. You will also need to inform your conveyancing solicitor that you are buying with a gifted deposit.

This will need to include:. Bigger banks and building societies will usually have a gifted deposit declaration form that can be filled out. But smaller lenders may request a signed and certified letter. Mortgage lenders view gifted deposits and loaned deposits as completely different things. There is no limit on how large a gifted deposit you receive can be, unless a lender stipulates this. But bear in mind the gift could be subject to inheritance tax. Any unused allowance can be carried over from the previous year.

This is because if the person gifting the money dies within seven years of handing it over it would still be classed as part of their estate for inheritance tax purposes. And the amount of tax due on the gift decreases as the seven years elapse. To find out more, read our guide How to keep on top of inheritance tax.

This can be drawn up by the solicitor working on the property. It will state who the money was given to — this allows you to specify that you gifted it to your chid and not to them and their partner. So if the couple split up, it will make sure your child keeps ownership of the money you gifted.