Many property purchasers, particularly for first time buyers are increasingly relying on a gift of cash, for all or part of the deposit, from family to help them get onto the property ladder.
When a property is purchased using a gift you need to alert your solicitor as early as possible as legal checks have to be carried out to comply with anti-money laundering rules.
Here at ORJ we have compiled some simple steps to help you avoid any significant delays in the transaction.
Inform your solicitor as soon as possible
As soon as your offer is accepted, it is important to inform your solicitor that some or all of your deposit is being provided by a third party.
It is also recommended that you inform your mortgage advisor from the outset that you are purchasing a property with aid of a gift.
Your mortgage advisor will then be able to inform the lender of the gifted deposit. Consequently, when we report the same to the lender they will be able to confirm that they have been made aware of the third party payment and are happy to proceed.
Your solicitor will be required to carry out legal checks on the person providing you with a gift to comply with anti-money laundering rules. Providing this information to your solicitor early in the transaction will help avoid any delays.
Provide confirmation and evidence of the gift
As soon as we have been made aware that some or all of your deposit is a gift, we shall send out the necessary paperwork to the person providing the gift.
We will require written consent from the third party as to whether they intend the monies to be a gift or loan. We will also need to ascertain whether the third party requires any legal interest in the property being purchased.
We will advise the third party to take independent legal advice to ensure that they are fully aware of the implications providing our client with funds.
Along with the written confirmation from the third party, we will require the following:
- proof of identity
- copy bank statement or sufficient evidence to show where the funds have originated from (for example savings / inheritance)
Reporting to the Lender
Once we have received all of the above, we will write to the Lender to inform them about the third party payment. Once a response has been received (which is usually within a week of them being made aware of the gift) then the transaction can progress further.
Why choose ORJ?
The conveyancing team at ORJ Solicitors are specialists and can provide the advice you need every step of the way. We are here to make the process of purchasing a property with a gifted deposit as simple and hassle-free as possible. We recognise that you need expert assistance to ensure your property purchase runs smoothly. It’s all part of the highly efficient conveyancing service at ORJ.
If you would like to receive a quotation or require further information then please do not hesitate to call our friendly conveyancing team on 01785 223440.