One of the biggest hurdles for first-time buyers is saving up a Gifted Deposit for Mortgage. If you’re struggling to build up your savings, you’re not alone, and it’s very common for parents to step in and help. In fact, I help many clients each month who are using gifted deposits from family to buy their first home.
If you’re in this position, here’s what you need to know about how gifted deposits work and what lenders will expect.
What Is a Gifted Deposit?
A gifted deposit is when a family member (often a parent) gives you money to use toward your Gifted Deposit for Mortgage. The key word here is gifted. This means the money is given freely with no expectation that it will be paid back. Your lender will want confirmation of this in writing.
Gifted deposits are perfectly acceptable and widely used in mortgage applications. However, there are specific rules and documentation required depending on where the money is coming from and how much is being gifted.
If the Money Is Coming From the UK
If your parents (or another family member) live in the UK and are gifting you money:
- Up to £20,000
This is straightforward. Your broker will ask for a gifted deposit letter (or template), which the donor fills out to confirm the funds are a gift and not a loan. It’s a simple, one-step process. - More than £20,000
In addition to the gifted deposit letter, lenders will also require:- Bank statements from the donor showing the source of the funds
- Possibly further identification or proof of origin, depending on the lender
If the Money Is Coming From Outside the UK
If your family is sending money from abroad — something I see often with my clients who are foreign nationals, the process involves a few more steps, regardless of the amount:
- Gifted deposit letter confirming it’s a gift
- Bank statements from the donor showing the origin of funds
- ID for the donor
- Additional supporting documents (such as a sales agreement if the money came from selling a property abroad)
If the documents are not in English, the lender will usually require certified translations. For example, if your parents sold a property overseas to give you the funds, a translated version of the sales agreement may be needed.
It’s All About Following the Right Process
While it may sound like a lot, it’s a very manageable process when guided by a broker. I regularly support clients using gifted deposits, whether the money is coming from the UK or overseas, and my role is to make sure everything is in place so there are no surprises during your mortgage application.
Lenders simply want to verify where the money has come from and that it’s a genuine gift. As long as you can provide the right paperwork, there’s no reason this should slow things down.
If you’re thinking about using a gifted deposit to buy your first home, get in touch. I’ll walk you through everything and make sure you’re prepared, so you can move forward with confidence.
Find out more in my video on my YouTube channel…
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