Due to gifted deposits becoming more popular, particularly amongst First Time Buyers in Derby, it is important that a person who receives one knows how to go about utilising it and pros and cons attached.
It tends to be “bank of Mum and Dad” that gifts the deposit to the applicant and this is acceptable to most Lenders. In addition, your Mortgage Broker in Derby and lender/solicitor will be required to see evidence of the build-up of funds and also identification.
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.
There isn’t a maximum limit on the amount of gift you can receive though, typically a normal deposit is around 10% of the purchase price so if you receive a gifted deposit figure out whether it matches what you’ll need or whether you may need to save a bit on the side.