How to get deposit for mortgage right?

When you are buying a house and putting a deposit for the purchase, source of funds for deposit must first be evidenced. This is due to Anti Money Laundering Regulations (AML) as the lender must be sure that you are using legal source of funding towards the purchase.

Usually, most common source of deposit is own savings which can be easily evidenced by bank or savings account statements, typically, from the last few months but there is no limit as to how many months back you will be asked to provide.

Second most common source of deposit used for mortgage is a gift. It can be one from a close blood relative, e.g. a parent or a sibling, but some lenders would also accept gifts from others who are not so closely related. In case of a gift, a donor must also provide their bank statements to evidence that they legally owned the money and they need to provide a form of ID as well as a letter stating this is a true gift, not a loan and that they do not expect any interest in the property for this.

There may be other sources of deposit like capital raised on another property, inheritance money or very rarely, a loan which can be accepted by only one or two lenders.

Source of deposit needs to be evidenced to a broker, solicitor and a lender.

If you have any questions about his or any other aspect of a mortgage or house buying process, feel free to contact us.