Moneyman Manchester

Gifted Deposit Mortgage FAQ’s

Gifted Deposit Mortgage Advice

In terms of gifted deposits, here are some answers to the most noteworthy questions that we receive;

Who can gift the deposit?

It tends to be “Bank of Mum and Dad” (or Gran and Grandad) that gifts the deposit to the applicant and this is acceptable to most Lenders. The gift must be evidenced by way of bank statements from the donor + their ID.

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.  As a result, 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.

Finally, how much can be gifted?

There isn’t a maximum limit on the amount of gift you can receive, although I know of at least one Lender that insists you put in at least 5% deposit from your own funds.

Malcolm Davidson
Mortgage Broker in Manchester
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