subject: Gifted deposits – First Time Buyers – cheap conveyancing? [print this page] Gifted deposits First Time Buyers cheap conveyancing?
Gifted deposits are what people mean when a purchaser of a property has the required 10% (or higher or lower) deposit payable on exchange of contracts given (or 'gifted') to them by another person. It could be the seller who gives it.
That is fine, as anyone can look to give money to a person to help buy them a property.
But when a purchaser needs a mortgage, the Lender should be told about the plan, as once the mortgage offer is issued, and the conveyancing process has got that far, the conveyancer is duty bound to get consent from the Lender when the borrower is not using their own resources to fund the purchase. If the Lender has not consented up until that point, they may say 'no', ending the home buyers dreams of proceeding at such a late stage - with the wasted fees that that would incur.
But invariably, even when you do inform your Lender of the plan at the start, the Lender will fail to comment on it in the mortgage offer, and so the conveyancer still needs to ask for that consent - but that is a formality usually. Unless your mortgage broker did not explain the plan correctly to your Lender of course.
Choose your mortgage broker wisely, as all conveyancers can recommend a particular one they work with - I certainly can, very good ones indeed.
As for First Time Buyers, the gifted deposit comes in very handy, and it is usually their parents/in law who make this gift as a helping hand to get them on to the property ladder - particularly in the present climate. The First Time Buyer can then look to secure the rest of the purchase price via a mortgage, now that they do not need savings to fund a deposit of their own.
Lastly, the choice of your conveyancer is crucial. My other articles on the subject address the top tips and ways to help secure a great conveyancer, rather than a barely fit for purpose one that many estate agents would have you believe are suitable - and the secret reasons why estate agents would do that to you in the first place.
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