Gift Letter

K

kevsy07

Guest
My mortgage provider has asked for a gift letter to show I received my deposit as a gift from my parents. Does anybody know if they can request the statements from the gift payer to prove that is where it came from? I'm interested in legally how far a bank can dig. If anybody could advise I much appreciate it.
 
Most lenders don't require proof of the source of the gift - a letter from your parents confirming

a. the amount to be gifted

b. that it's a gift not a loan and

c. that they will have no legal interest in the property

will suffice.

Some lenders require that the giftee (?) take independent legal advice or acknowledge that they have been advised to do so but have declined.

Sarah W
 
Thanks Sarah, do you know of any banks that would actually request a statement from the gift payer or a copy of the cheque or proof of transfer?
 
on a similar vein, I am hoping to purchase in the near future and will be putting a large sum towards the purchase price myself - will I need to furnish any information on this for money laundering legislation etc? All is legitimate i.e. taxed & declared - and ultimately can be tracked back to salary etc. but will I be expected to explain how accumulated? When getting approval in principle I needed to show I had the money (i.e. account balances) but not how it was accumulated.
 
Kevsy07
I had to do one of these letters when I applied for my first mortgage about 4 yrs ago. I had 2 loans outstanding so I said that my folks were going to 'gift' me €20K. In reality, they were loaning me €12k for deposit.
In the end it took 12 months for the property to be ready and in that time I paid off the loans so when it actually came to producing the letter I said that it was €10K and sent in letter. Bank came back and said "You said they were gifting €20k", so I printed out another letter with €20k on it, my dad signed again and bank were happy with that. It was a bit of a joke really!
In my experience all the banks want is
1. your folks to sign that they are not going to claim a share in your property (leaving you unable to repay the mortgage back, say, if you sold)
2. that this is not a loan as loans count against the amt they will loan you.
So for me anyway, it was just a piece of paperwork. They didn't want any more info. I won't mention the bank but it was one of the major ones.

By the way, the bank are probably making you feel like you are jumping thru hoops to get this mortgage, but don't worry, it will be worth it in the end :)
 
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