There are several potential sources you can consider when it comes to getting together a deposit to buy a property. Providing proof of the source of your deposit is a key requirement in the application process and will need to be given to both the lender and the solicitor.
Each mortgage lender will have their own criteria as to what they deem as an acceptable source of deposit. These include:
This is the most traditional and straight-forward way to fund a deposit for your home deposit. Lenders are happy to accept deposits funded by the applicant’s personal savings, although they may want to see bank statements to show the balance increasing over time.
Lenders are usually fine to accept a deposit funded by inheritance you may have received. You will be required to share legal documents from the Will’s Executor showing details of the amount, as well as evidence the money in your account.
Most mortgage lenders are happy if your deposit was gifted to you by a close relative. Some lenders even allow gifts from friends or more distant relatives. You will need to provide a signed legal agreement declaring that the money does not need to be re-paid.
If you are already a homeowner and you are moving home, you may be using the “equity” in your current property as a deposit for your new one. The solicitor will deal with this for you when the sale and purchase complete.
If you own another property, you may have enough equity to be able to release by way of a re-mortgage to make up a deposit to buy another property.
Landlords are now able to gift equity to tenants as part of a mortgage transaction, so be sure to ask if this is an option if you landlord is selling
Finally, if you simply cannot raise funds for a deposit, it looks like 100% mortgages are returning – so you may not need one anyway!
If you have further questions about mortgage deposits, please get in touch with our team of experts.
01628 507 477 | team@mortgagerequired.com
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