FINANCE
Ask Emilia...
I don’t understand what I need to provide for my deposit? Emilia is the Sales Director at Metro Finance, the largest shared ownership mortgage provider. Metro Finance helps around 2,400 shared ownership buyers each month, working with more than 90 housing associations to make the process for the buyer as simple as possible, and helping to innovate the shared ownership product. Emilia has worked with Metro Finance for over 10 years, specialising in shared ownership When purchasing your property, you will always be asked about the source of your deposit, and you’ll always have to provide evidence of this to your mortgage adviser and solicitor. It may at times feel intrusive, however it is critical for anti-money laundering purposes that all firms within the homebuying process verify the source of funds, and ensure the money is coming from both a legal place, and also a suitable place for a mortgage lender
SO, WHAT ARE THE MOST COMMON ACCEPTABLE DEPOSIT SOURCES? SAVINGS One of the most common deposit sources and acceptable to all lenders is proof of savings. You will normally need to provide proof of 3-6 months savings accounts, however if the money has been transferred during this time from another account, you need to provide this account as well. There needs to be a full understanding of where the money has come from, which is most likely going to be from your wages. If the money has been saved in an overseas account you may well be asked to provide translated bank statements. If the money has originated from the sale of an asset, then you could be asked to provide proof of sale ie receipts. If the money has been transferred in from someone else, this is no longer savings and treated as a gift.
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GIFTS
INHERITANCE
Some people are lucky enough to have generous people around them who can gift the funds. If this is coming from an immediate family member in the UK, you won’t hit any problems. It can become trickier with some lenders if the gifter lives outside the UK, or is not an immediate family member, but certainly not impossible so don’t panic! Be honest about the original source of funds so that your adviser can place the mortgage correctly. You don’t want any nasty surprises prior to completion! Gifters will need to complete a gifted deposit form (always obtain them from your mortgage adviser), as well as undergoing ID checks and also providing 3-6 months of their bank statements. If the money has been transferred from another account, then you will be asked to provide this account as well, as part of due diligence. If a gift is coming from overseas, don’t be surprised if you are required to provide translated bank statements.
Unfortunately, this can feel very intrusive, however again the mortgage adviser and lender would have to satisfy themselves this is the source of funds. If the funds are with a solicitor or have been transferred from the solicitor, then a letter from the solicitor would suffice. However, if no solicitor is involved, then a copy of the Will may be requested. If the money was inherited by someone else who has passed it on, this would be treated as a gift.
INVESTMENTS At the early stages of the process, you can just provide a statement showing the value of your investment. Again, if funds were recently invested there would need to be an understanding of where these funds originated from.
DIVORCE SETTLEMENT A letter from your solicitor or a court document outlining the amount you will be receiving/have received would be acceptable. If the money has been received then the corresponding bank statement would be required. An unacceptable deposit source would be if you cannot provide evidence for where the funds have originated. The more detail you provide in terms of where your deposit money has come from early on, the more detail your mortgage adviser can provide in terms of documents, so make sure you disclose as much as you possibly can. And don’t worry if questions and further documents are being asked for. Mortgage advisers and solicitors are regulated, and they have to hold this information on your file. It’s just the due diligence that has to be done by them. If you’re unsure about what to provide, always ask your mortgage adviser who will be happy to help. metrofinance.co.uk
First Time Buyer August/September 2022
FTB 110-111 Finance-Metro August-September22.indd 110
12/07/2022 14:49
