Gift towards deposit- Mortgage Application

EvenStevens

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If you are receiving a gift of money towards a deposit for a house does that have to be in place before you can apply for a mortgage. Do the banks need to see those funds before they will make a decision or even consider the application?
Thanks.
 
No, it doesn't have to be in your account when making the initial application. When going to loan offer, the giftor will have to sign a declaration stating that it is a gift, they will also have to show bank statements too. If the gift is coming from someone who is not a parent, there is possible a CAT liability which will have to be explained.


Steven
www.bluewaterfp.ie
 
Just be aware that you will need to have other savings and a record of saving over the past 6 months when applying. Relying on gifts to make up a large portion of the required deposit won't look too good on the application.
 
Just be aware that you will need to have other savings and a record of saving over the past 6 months when applying. Relying on gifts to make up a large portion of the required deposit won't look too good on the application.

Yes, you have to be able to show the bank that you can afford the repayments if interest rates go up by 2%. This is through rent, current mortgage repayments and savings.
 
Just be aware that you will need to have other savings and a record of saving over the past 6 months when applying. Relying on gifts to make up a large portion of the required deposit won't look too good on the application.

for my own curiosity would that still apply if you were a second time buyer? And getting the deposit from the sale of your original house.
 
for my own curiosity would that still apply if you were a second time buyer? And getting the deposit from the sale of your original house.
Your existing mortgage payments will count towards affordability calculation.
 
Your existing mortgage payments will count towards affordability calculation.

Exactly, and if you're seeking a larger mortgage, you'll need to show regular savings alongside your ongoing mortgage repayments.
 
Recent experience:

The bank did not ask to see a bank statement from the person gifting the money. And the person buying the house did not have to show the gift money in her account at any stage. The person gifting the money initially signed a declaration stating that it was indeed a gift. Purchaser gave this to the bank. Weeks later when drawdown day approached, gift was then transferred to purchaser's account, and purchaser then transferred the balance of funds including the gift to her solicitor, and her solicitor did the rest. Nobody asked to see statement showing the gift having being lodged into purchaser's account or proof where it actually came from in the end.

Bank, PTSB, August 2018.
 
Thanks for the feedback and the caveats. Been saving regularly for over a year on top of other savings i had in place already. My savings would be two thirds of the deposit amount so hoping that's sufficient.
 
Very interesting. I am in the process of giving my son a gift towards deposit for new house. I have got the form to sign but I didn't know they could ask for my bank statement. They have queried a lodgement for Savings Bonds that he lodged into his account & needs proof of where he acquired this money. He purchased a car with that particular money, will they now ask how he spent the money.
 
Very interesting. I am in the process of giving my son a gift towards deposit for new house. I have got the form to sign but I didn't know they could ask for my bank statement. They have queried a lodgement for Savings Bonds that he lodged into his account & needs proof of where he acquired this money. He purchased a car with that particular money, will they now ask how he spent the money.
Only one bank currently asks for a statement from the donor, as far as I am aware (if it's more than one, it's certainly in the large minority). As an aside, I'm not sure how they can even demand this, considering that the donor is not party to the loan and has not signed any documentation regarding how their data will be processed.

Any bank may ask how a lump sum was spent, as they want to make sure that it is not a partial repayment of a loan, or a transfer to another bank account that was not provided. However, if he has already been approved in principle, and if those funds did not form part of the deposit for the house, then the query may not arise. Worst case, it would be straightforward to provide a paper trail.

Best regards,
Dave Curry (broker)
https://www.linkedin.com/in/davecurryirl
 
Thanks a mill Dave. This particular Savings Bond was initially invested in 2009, re-invested in 2012 when it matured. Re-invested again for another 3 years & re-invested again in 2015 until he withdrew it in May 2018. In that period it gained 2,515e interest. (9 years) The query is where he acquired the money!! It was literally saving by degrees & investing in An Post. (good interest at that time). Is there a proper NAME for what he needs from An Post when he requests this info. badly worded)
Great help!!
 
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In that case it should be sufficient to provide a statement for the savings bond at maturity. He can then explain that some of the proceeds were spent on a car and the remainder was lodged to his account.
 
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