If you’re looking to buy a new home, it’s likely that you’ll need to put down a deposit. These days, the minimum deposit is usually equivalent to 5% of the value of the property. A 5% deposit will mean you have a 95% LTV (Loan to Value) ratio.
With house prices in the UK currently at a staggering 8 x average earnings, just getting on the housing ladder can be very difficult. This is where a gifted deposit might help.
A gifted deposit is a sum of money given to you by someone else, usually a member of your family, so that you can put down enough of a deposit to buy a home. Importantly, the money you are gifted must be given by way of a gift and not a loan.
Many mortgage lenders will accept a gifted deposit as all or part of the proof of deposit and borrower provides when requesting a mortgage. However, in order for the deposit to be accepted, the lender will normally require that the following questions are addressed;
It’s not unusual for the gifter to be requested to provide a statement of account for where the money has originated. This is usual, for protection against money laundering. Also, should the gifter die within 7 years of giving the money, and the estate is in excess of the current Inheritance Tax (IHT) allowances at the time, there may be some IHT to pay on the gift, usually on a sliding scale.
For more information, book a free appointment with one of our mortgage advisers now.
The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes including income tax and capital gains tax.
3 days ago
The chancellor has advised that landlords could have another tax to pay this autumn as the Treasury decide whether to extend national insurance contributions to rental income.
According to a report in the Guardian, senior ministers have asked Treasury officials to look into a “proportional” property tax to see how it would work as an alternative to the existing stamp duty land tax on owner-occupied homes.
More than a quarter of UK adults in long-term relationships (26%) have reported that despite living together, they keep their finances separate from one another.
There has been a rise in both rent and mortgage costs over the last three years, with renters seeing a greater increase in their monthly payments than those with a mortgaged property.
26 days ago
The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers.
28 days ago
Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer.
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.