Salvaging a mortgage application

[bmd]

My gf and I are buying a house and the mortgage provider asked us where we got the deposit from. I wanted to tell them we got it from my dad, because we did. But my gf decided to tell them that she had saved it up by putting the money into her sister's account. She has been putting money into her sister's account every month for a couple of years to pay for a car.

The mortgage provider now want to see her sister's account to prove what she has told them. I have told her that it will be obvious that the money she pays into her sister's account goes towards paying for the car because there will be a corresponding debit every month.

So my idea of being honest with them about this is carrying more weight now but my concern is that if we do tell the mortgage provider the truth then they will see us as untrustworthy and not give us the mortgage, which I could understand tbh.

My question is, if we speak to our financial advisor and tell him the truth would he be obliged to tell the provider and could we then get into trouble for lying about this? My understanding is that the provider wishes to see a paper trail for the deposit to satisfy the money laundering laws, which is what makes me wonder whether we've dug a bit of a hole for ourselves.

 

[Kanda]

Tell the truth. I think they have to do it for money laundering reasons...

 

[bi0boy]

Can't you just say that you've changed your mind, and will now be using dad money instead of sister money.

 

[bmd]

Tell the truth. I think they have to do it for money laundering reasons...

I would like to tell the truth but my question is, will that land us in trouble with the law?

 

[bmd]

Can't you just say that you've changed your mind, and will now be using dad money instead of sister money.

That is a really good idea bioboy! I will put that to the gf when I get home. I'm shit at lying which is why I always want to tell the truth but that could get us out of this nicely.

 

[Puddy_Tat]

Can't you just say that you've changed your mind, and will now be using dad money instead of sister money.

They will probably want a letter from dad to confirm this

 

[Kanda]

I would like to tell the truth but my question is, will that land us in trouble with the law?

Sorry, I missed your last paragraph /doh!

 

[Glitter]

Why did you lie in the first place? Just out of interest?

 

[Edie]

Yes mate, just say on reviewing your financial circumstances, you have decided to use the money from your old man instead. They'll probably know you (for whatever reason) told them an untruth first off, but I doubt they'll care tbh.

 

[bmd]

Why did you lie in the first place? Just out of interest?

I didn't get the chance to give my opinion. My gf is getting the mortgage due to me having an unspent DRO against me. They asked her a question about joint accounts and she decided that she would tell them the sister thing without asking me. She told me and I was a bit pissed off because I knew it would come on top.

 

[The Boy]

I

They will probably want a letter from dad to confirm this

No probably about it. They will want to see evidence of where the money is coming from - letter will be sufficient. Although best not to use the words 'lend', 'loan' or 'borrow' in the letter. I can recall a mortgage application running into problems with this when I worked in a bank - something to do with third party interests, iirc.

Edit: I am not a financial advisor, naturally.

 

[bmd]

They will probably want a letter from dad to confirm this

That's fine, we can evidence that. I didn't want to lie because we can't evidence the whole "I was saving the money with my sister" thing.

 

[Edie]

I didn't get the chance to give my opinion. My gf is getting the mortgage due to me having an unspent DRO against me. They asked her a question about joint accounts and she decided that she would tell them the sister thing without asking me. She told me and I was a bit pissed off because I knew it would come on top.

People say all kinds of odd things when asked random questions. I wouldn't worry about it. Probably in her head there were two 'pots of money' that were both in some way available for the job, and it sounded better that you weren't borrowing it. Tbf if you are upfront now it shouldn't be a bother.

 

[Puddy_Tat]

Although best not to use the words 'lend', 'loan' or 'borrow' in the letter. I can recall a mortgage application running into problems with this when I worked in a bank - something to do with third party interests, iirc.

Yes, the letter would need to state something like it's an unconditional gift.

Otherwise they will ask questions about your ability to pay both the mortgage and the loan to dad, and want to know whether dad considers it a secured loan or what.

(and i'm not a financial advisor either)

 

[bmd]

@Edie - I hope so. I don't really want to get into why the money is coming from my dad now rather than her sister because we were dishonest and I wonder if a bank would lend someone loads of money who they know to be dishonest. Of course people lie all the time but if I was a bank manager looking at a mortgage application in this climate I would have to have a serious think about the eligibility of someone who had clearly been dishonest with me on a mortgage application.

 

[bmd]

Yes, the letter would need to state something like it's an unconditional gift.

Otherwise they will ask questions about your ability to pay both the mortgage and the loan to dad, and want to know whether dad considers it a secured loan or what.

(and i'm not a financial advisor either)

Thanks for that. I feel rather frustrated with our financial advisor as this is the kind of advice that we need from him but then if we aren't telling him he can't advise us.

He has changed mortgage provider without asking us which then meant changing credit record company which then meant we had to go through a whole load of record updating/faffing once more, putting us back a couple of months.

 

[Puddy_Tat]

He has changed mortgage provider without asking us which then meant changing credit record company which then meant we had to go through a whole load of record updating/faffing once more, putting us back a couple of months.

 

[bmd]

Also, will they take a letter? They're asking for statements, which makes sense to me as it's a clear record. As this is all about money laundering laws I'd have thought a letter from person x wouldn't be sufficient. If it is then her sister still could come through for us!

 

[Monkeygrinder's Organ]

We're doing this now. They've asked for a letter stating that the money is a gift and that the gifter will have no stake in the house. That's all they need if the money has been paid to you (although they want it evidenced in your account). They'll also need a statement showing the balance (nothing else) if it's still to be paid. If they're asking for a statement showing actual payments in someone else's account I think that's probably because you've told them that you've been paying into it - ie it's acting as a savings account for you whoever's name happens to be on it.

 

[bmd]

We're doing this now. They've asked for a letter stating that the money is a gift and that the gifter will have no stake in the house. That's all they need if the money has been paid to you (although they want it evidenced in your account). They'll also need a statement showing the balance (nothing else) if it's still to be paid. If they're asking for a statement showing actual payments in someone else's account I think that's probably because you've told them that you've been paying into it - ie it's acting as a savings account for you whoever's name happens to be on it.

You are absolutely correct, we've told them we've been paying into the sister's account. Thanks for that.

 

[bmd]

Well we did the whole "dad's money is in the bank" thing and they point blank refused it, said that they won't accept a deposit that has been gifted and will only accept a deposit that has been saved for, with the appropriate evidence being bank statements showing that building up over time.

So it seems that not only do we need a large deposit but that we have to have saved that ourselves. I could have sworn that I read somewhere recently that about 30% of first time buyers are helped by their parents. I'm not sure where to go from here tbh and I'm pretty surprised that they won't accept a gifted deposit. We've both been paying rent for years, which is much more than the mortgage will be so I'm not sure why they think we won't be able to pay back the mortgage.

 

[temper_tantrum]

Sounds more like they think it's shifty because you changed your story. What does your financial advisor say?

 

[Monkeygrinder's Organ]

Yeah it's definitely not a point of principal, as you say it's not uncommon to have a gift from parents. It must be because you've told them one thing and are now suggesting another. I'd think you may have to reapply tbh., possibly with another provider.

 

[bi0boy]

Can't you just fuck them off and get a mortgage with a company that actually wants to do business with you?

 

[bmd]

Sounds more like they think it's shifty because you changed your story. What does your financial advisor say?

Apparently they wouldn't have even considered the application if they'd known the deposit was a gift as it's not allowable in their criteria due to an FSA ruling about money laundering.

 

[temper_tantrum]

Apparently they wouldn't have even considered the application if they'd known the deposit was a gift as it's not allowable in their criteria due to an FSA ruling about money laundering.

What does your financial advisor say???????????????????????????

 

[Belushi]

Apparently they wouldn't have even considered the application if they'd known the deposit was a gift as it's not allowable in their criteria due to an FSA ruling about money laundering.

Usually they just make whoever has gifted you the money sign a letter saying that its a gift and they wont have a claim against the property etc.

 

[bmd]

Can't you just fuck them off and get a mortgage with a company that actually wants to do business with you?

Our financial advisor says they want to lend us the money and that a lot of work has gone into the application, which has been approved on everything except 'deposit proof'.

I think I'm going to speak to our financial advisor and ask him if there's anyone else who would be a little more flexible.

I am left wondering if this is how it is these days. I have spoken to a few people who've expressed surprise at this but all of them only have experience of mortgages from before the whole bank implosion thing happened.

 

[spanglechick]

our deposit is a gift. it's really normal.

there's a mortgage with (iirc) lloyds tsb which requires you to save with them for six months, i think... but other than that, we didn't come across any lenders who wouldn't allow gifted deposits.

you'll need a different lender. which is a PITA.

edit - and our mortgage is going through RIGHT NOW.

 

[Monkeygrinder's Organ]

Apparently they wouldn't have even considered the application if they'd known the deposit was a gift as it's not allowable in their criteria due to an FSA ruling about money laundering.

That's rubbish (I suppose it may be their particular criteria) but it's not a FSA ruling.