How does a Gifted Deposit mortgage work?
In order to access a mortgage, you will need to have saved a deposit to put down on your home. The larger deposit you have, the more property you can potentially buy. You will also have access to lower rates if you have a larger deposit. This is because you will have what is called a lower loan to value.
It can be a struggle to save for a deposit which is why many look to family or friends to help them. This is where a gifted deposit can be useful.
These are the things you need to know if you are considering a Gifted Deposit Mortgage:
- The money must be a gift and cannot be a loan
- The person gifting you the deposit must write a letter stating that it is a gift. This is called a gifted deposit letter.
- As part of money laundering regulations, the person gifting you the deposit must be able to evidence the source of the money
- Usually, there is no limited to the amount of money someone can gift to you
- Often, the person gifting the deposit to you is a family member, but it can also come from someone like a god parent or even a friend.
- They can gift you the whole deposit or part of it if you have savings to contribute
- There may be inheritance tax implications for the person gifting you the deposit. So it might be worth them speaking to a financial adviser first.
There are other options available other than a gifted deposit that you might want to consider. You might also want to look at Shared Ownership mortgages, JBSP mortgages and the Forces Help to Buy Scheme.
At Your Mortgage Expert, we can talk you through all the options available and help you decide what is the most appropriate mortgage for your circumstances.
Speak to one of our experienced mortgage brokers today for Gifted Deposit Mortgage Advice.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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Email Dan AllenDan Allen - Mortgage Adviser
Dan Allen has worked with mortgages for over 10 years. He takes time to understand different lender criteria. His wealth of knowledge means he will know which lenders will work for you situation. -
Email Dan HarrisDan Harris - Mortgage Adviser
Dan Harris first started working in mortgages in 2004. Since then, he has helped lots of First Time Buyers. Dan has great attention to detail and will do the hard work to ensure you get the best recommendation.