Gifted Deposit Mortgage Advice in Nottingham
What is a Gifted Deposit?
As suggested in the name, a gifted deposit is a deposit that has been gifted to you. The amount can vary between the full deposit or a portion of it and an agreement will need to be in place to state that you won’t be required to repay it back to the gifter.
How can gifted deposits help?
Gifted deposits are brilliant if you have the costs for your monthly repayments but are having difficulty with paying the initial deposit.
If you have been gifted a lot more deposits, there is more of a chance to have access to better rates from a mortgage lender.
In the case where you are on a lower salary and are finding it a challenge to put some money aside for savings, this option can be very handy.
Who can gift the deposit?
As a Mortgage Broker in Nottingham, we have found that many customers get their gifted deposit from their parents (adopted parents and carers may be within this category, depending on the lender). Gifted deposits can be known as the ‘Bank of Mum & Dad’.
Sometimes, the parents aren’t the ones that provide a gifted deposit. Mortgage lenders may allow other family members to give a gifted deposit. This does depend on the lender so it’s important you are selective in order to find the right one. With this in mind, we would recommend that you seek open and honest Mortgage Advice in Nottingham.
Do your parents know you need help?
Through our experience in the mortgage industry, we are surprised to find the number of customers who are unaware of the fact their parents could potentially provide a boost to their mortgage. On the other hand, some customers are aware but don’t feel like they can ask their parents for help. It’s likely, however, that many parents are more than happy to help their kids get onto the property ladder.
Taking out a mortgage is generally the best option for First Time Buyers in Nottingham instead of renting because you could potentially be paying less money per month.
It’s common for a gifted deposit to be from an inheritance that parents may gift to their children earlier in life. You may find that parents save up enough for the deposit or release a certain amount of equity from their property.
Gifted Deposit v Loans
The majority of the time lenders won’t accept you using a loan to fund your mortgage deposit. With this being a loan, this can create uncertainty in a lender’s eyes as it can show to them that you may not have enough disposable income remaining to cover the costs of both the loan and the mortgage at the same time.
Who can benefit from a gifted deposit?
A gifted deposit can be a huge benefit to many types of buyers. You may be a first time buyer in Nottingham who is finding it difficult to pay to raise the deposit amount or you are moving home in Nottingham for a deposit boost and a gifted deposit could be your solution.
Is there a maximum or minimum gifted amount?
There is no particular limit on the amount of deposit someone can gift you, however, there are some lenders out there who would rather have an applicant who has saved a 5% deposit themselves, with any gifts being used as a booster towards this.
What proof is required?
With a gifted deposit, all lenders will provide you with a form that you must fill in. You may need to provide additional proof and ID (like a donor ID or bank statements), however, this comes down to the lender you are with.
Date Last Edited: February 19, 2024
