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What is a Gifted Deposit Mortgage?

If parents are looking for a way to help their children get on the property ladder, a gifted deposit can be the simplest way.  In terms of gifted deposits, here are the answers to a few commonly asked questions;

Who can gift the deposit?

It tends to be “Bank of Mum and Dad” that gifts the deposit to the applicant and this is acceptable to most Lenders.  Different mortgage lenders have different rules as to who can gift a deposit. Immediate family members, parents, brothers, sisters, and grandparents are usually ok.

Your Mortgage Broker and Lender/Solicitor will be required to see evidence of the build-up of funds and also identification.

Can it be a loan rather than a gift?

In almost all circumstances it needs to be a gift and the donor will sign a letter to confirm the funds are non-refundable. They will not put a “charge” on the property you are buying. Be careful though, taking out a personal loan just before applying for a mortgage will probably have a downward effect on your credit score.  This could lead to a mortgage application being rejected. Also, the monthly payments for the loan will have to be taken into account by the mortgage lender for affordability.

How much can be gifted?

There isn’t a maximum limit on the amount of gift you can receive.

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