Donor Gift Letter To Satisfy Your Mortgage Lender - What to Say
Your lender will want something along these lines...
• Confirm the amount of the gift.
• Whether the gift is repayable.
• Whether the donor will have an interest in the property.
• The donor's relationship to you, i.e. parent, brother, sister, grandparent.
• Confirmation of whether they will occupy the property.
NB: Hopefully this was dealt with by your mortgage broker during the application process.
You must supply your Conveyancer with evidence such as the donor gift letter, donor bank statements and donor ID.
Your lender MUST be informed of any monetary gift, or payment, or price reduction. Lender consent will be required prior to exchange.
NB: Where you have a mortgage, the donor must usually confirm that the gift WILL NOT be repayable and that they WILL NOT acquire any interest in the property.
ID & Source of Funds
The donor is also required to provide Proof of Identity & Proof of Address under current regulations. A full paper trail and explanation as to how funds were accumulated is ALWAYS required now.
The Government has made Conveyancers frontline in combatting monetary frauds & crimes plus money laundering. Conveyancers have no choice and risk huge penalties and prison time for non-compliance.
Your Conveyancer will require certified copies of the ID plus source of funds evidence. (How The monies were acquired).
You cannot proceed without this as that puts your Conveyancer in breach of regulations and their duty of care to your lender.
A donor gift may affect your mortgage and could delay your matter. Especially where your lender is unaware.