{"id":722,"date":"2022-10-03T10:14:10","date_gmt":"2022-10-03T09:14:10","guid":{"rendered":"https:\/\/www.redstareducation.co.uk\/blog\/?p=722"},"modified":"2022-10-17T08:40:17","modified_gmt":"2022-10-17T07:40:17","slug":"how-gifted-deposit-mortgages-work","status":"publish","type":"post","link":"https:\/\/www.redstareducation.co.uk\/blog\/how-gifted-deposit-mortgages-work\/","title":{"rendered":"How Gifted Deposit Mortgages Work"},"content":{"rendered":"

According to The Money Charity\u2019s August statistics<\/a>, if first time buyers were to save at the average rate out of the average UK income, it would take them 26 years to save for a house deposit.\u00a0Because of this, many are turning to the help of family instead, which is where gifted deposit mortgages come into play.<\/p>\n

What is a Gifted Deposit Mortgage?<\/h2>\n

This is when a donor gives money (with no strings attached) to a home-buyer, in order to help them purchase the property. This usually is to help with the cost of the cash deposit, and it can either cover the full cost or work as a contribution towards the total amount.<\/p>\n

The money is transferred from the donor to the home buyer with the help of some paperwork, to make sure everything is above board.<\/p>\n

What Needs to be Done First?<\/h2>\n

Before any paperwork gets involved, the donor and home buyer should agree on the amount that the donor is paying towards the house deposit to ensure there is no confusion further down the line.<\/p>\n

The home buyer then needs to figure out whether they need any extra money to pay the deposit, or whether the gifted money will cover the entire amount. If more money will be needed on top of the gifted deposit, the home buyer will have to make up the remaining amount with any savings they have.<\/p>\n

Next Step, the Gifted Deposit Letter<\/h2>\n

A gifted deposit letter is usually required to complete the transaction. Both the donor and a witness will have to sign and date the document.<\/p>\n

Once the lender accepts the gifted deposit, the money can then be transferred across to the home buyer and the purchase can be made.<\/p>\n

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What do you Need to Include?<\/h2>\n

The gifted deposit letter should outline:<\/p>\n