During our time as Mortgage Broker in Hull, we understand that sometimes saving together a deposit is one of the biggest hurdles for any First Time Buyer in Hull to get onto the property ladder.
We tend to find parents, grandparents, and on rare occasions, even friends who want to help their friend/family get onto the property ladder. They’ll provide either a portion or gift the entire amount of the deposit to put down on a property and obtain a mortgage. In this article, we will cover what gifted deposits are and how they work.
As we’ve mentioned above, a gifted deposit is a money given by parents, grandparents, or friends to a homebuyer to use towards your deposit to put down on a property and obtain a mortgage. It can either be a portion or the entire amount.
The money given isn’t a loan and gifted deposits are given to you with an understanding that the money doesn’t need to be repaid.
Gifted deposits are helpful to First Time Buyers in Hull. Mainly those who are financially capable of covering their mortgage repayments, but struggling to save up for the initial deposit.
We tend to find, that these situations happen quote often. Perhaps they’ll have larger outgoings, such as rental payments, home energy bills, and essentials. That there isn’t anything else left to put into savings for a deposit. By receiving a gifted deposit, this will allow you to gain access to much better rates of interest during your mortgage process, especially if that gift is above the minimum 5-10% deposit requirement.
As we’ve said, it’s mainly parents or carers who can gift you the deposit. This is often discussed online using the terminology “Bank of Mum & Dad”, don’t let the name throw you off this can include adopted parents too.
Sometimes other family members may also be able to help out with a gifted deposit. Though this entirely depends on the mortgage lender that you end up with. That’s why it’s worth getting in touch to speak to a Mortgage Advisor in Hull beforehand.
We often hear back from customers who have no idea their parents can help with their mortgage! This is why we aim to inform and encounter more people to ask for some extra help, so more people can get a chance to get onto the property ladder.
The majority of parents are more than happy to help their children to find a home of their own, comfortably living as opposed to struggling whilst living in a rental property.
In some areas taking out a mortgage may save you more money per month than you would get from renting, of course, this depends on several factors, but in some circumstances, it can happen. Gifted deposits can come from inheritance, although parents can sometimes gift it much earlier if they have enough money saved or have released equity from their own home.
Some mortgage lenders out there won’t accept loans as a means of paying off your deposit. It will be often related to the lender not being so sure if you can afford to pay back both simultaneously.
There are no limits to the amount that can be gifted to a home buyer, it’s worth remembering that some lenders will want you to have a minimum of 5% from your own savings. The more you can afford to put down, perhaps combining savings and gifts, you’ll open yourself up to better deals.
We tend to find, that it’s normally First Time Buyers and Home Movers in Hull who will benefit the most from the gifted deposit. A gifted deposit can be used to cover the initial 5% deposit for the Help to Buy Equity Loan Scheme. However, this will depend on the lender.
Your donor will need to sign a gifted deposit form stating that it is not a loan and is in fact a gift. Additional proof such as ID, address, and bank statements will be required.
As a fast and friendly Mortgage Broker in Hull, we aim to provide our customers with the highest level of customer service, through a fast and friendly Mortgage Advice in Hull service. When someone gets in touch with us for Mortgage Advice in Hull, we will consider all cases, no matter how complex, and try our best to find a resolution.
A open and honest Mortgage Broker in Hull is available seven days a week, from early on until late. Our Mortgage Advisors in Hull will be ready and waiting to offer their support at all times. Book your free mortgage appointment today with an expert mortgage advisor in Hull and we’ll see how we are able to help you on your mortgage journey.
Last Edited 16/08/2022