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when you purchase a property you need to show proof of deposit so in today's episode we'll be going over what documents you'll need to provide to show proof of deposit when purchasing a property hello welcome back to our channel podcast my name's gemma and here at west we talk about all things relating to money mortgages and positive money mindset so if that interests you then be sure to subscribe to our channel and hit the thumbs up it really helps with our youtube algorithm and means that you won't miss out on any of our videos on today's episode of let's talk money in moderatis we have 50 joining us once again and for those of you who don't know iftd ify is a trained accountant and mortgage advisor who has been in the industry for over 11 years and he is also one of the founding directors here at wis welcome back instead how are you doing today hi i'm very well thank you i'm good thank you today's episode we're talking all about proof of deposit so i think for those people who aren't really sure let's just kind of talk about what is proof of deposit yeah so when you buy a property especially if it's through a mortgage the lenders as well as the solicitors want to know how much deposit you're putting down and they want to know how you kind of save that money up right so that's kind of what's known as a pro deposit so we need to show the lenders as well as the solicitors how that money was made up as a proof of deposit right in most cases is the money that you have in your savings right so that's kind of what it is yeah all right fd so today we're going to be talking about what documents are acceptable as proof of deposit and we've got the first one here is bank statements yeah i think that's the most simplest one for majority that will be that right because people save money in their bank accounts right so usually it's a savings account some people do have it in a current account so bank will want to see that statement so they generally ask for three months bank statements some banks ask up to about six months bank statements but generally it's three months so looking at the bank statements you know banks will be satisfied that deposit can be used so that's what the banks will mainly look at but the banks sometimes ask how you made up that money that's the most important question right so let's take an easy example if somebody is regularly working and say setting aside say 500 pounds towards their deposit of buying the house they will see that to build up over a period of time so let's say somebody had 10 000 pounds they can show that it has been building up over a period of time the banks will be satisfied that's the simplest example that you can use but sometimes people have business income dividends various other things so banks may need some additional evidence on top of that but they mainly look at the bank statements right see because that's where people save most of their money gone are the days that people have cash at home right because everybody puts the money in the bank right so the bank statements are generally the best form of evidence yeah okay moving on to the next one and some of our customers have gifted deposits so just wanted to talk through you know in regards to a gifted deposit what documents were acceptable what they do because it again is quite common especially with this first time buyers we find that because parents give money their children or you know siblings give money to their siblings so we know with first time buyers a lot of them sort of struggle to get into the property letter and a lot of them don't have all the savings they require and you know the bank of mom and dad generally comes to the rescue right so if mom and dad is giving you the money you need to prove this that it came from mom and dad so mum and dad has to sign a letter to say that it is a gift that's why we call it a gifted deposit right it is a gift from the parents loans are generally not acceptable because knowing something you've got to pay back right so if it is a pure gift you need to get that letter from the parents say that there's no conditions attached but just be mindful that most banks will also ask evidence of the parents building up that money so they may require bank statements of the parents as well right where the money is being held right so if they have sort of savings if they've been having that for years you know that's you know perfect right but again you know circumstances may vary right so from person to person so yeah you do have doubts on these areas you know please speak to us or speak to another advisor who can guide you on this one right so if you're giving a gifted deposit letter that may not be enough you might need statements of your parents or always the donor to give you their statements as well yeah and we can also help you with drafting the gifted deposit letter can't we fd yeah that's right yeah so we have templates that you can use you know most banks use sort of similar templates but you may have to tweak the template a little bit depending on the bank you use right again we are open to give you guidance if it's needed getting your mortgage online doesn't have to be complicated at wis our website will help guide you through step by step our fully qualified advisors can help you get the most suitable mortgage for you then you can relax safe in the knowledge that wis are working in the background to get your mortgage approved wis online mortgages made simple okay number three we've got the foreign remittance um if you're using that as a proof of deposit yeah i mean as of late we have had foreign nationals who have applied for mortgages or people who are born in a different country but eventually become british right so they sometimes have monies abroad sometimes their family has money abroad as well right so if they're bringing it down to the uk that's known as foreign remittances right so with foreign remittances you have to be very careful because banks can be a little strict on this right so you have to make sure that you show an audit trail on how the money came to the uk so what audit trail means is let's say you have money in your bank account in ex country and it's coming to the uk you just need to show how it came to the uk so the banks will generally want to see how that money has been built up if you sort of save some money some time ago perfect you know that money can be used so that money they will want to see it leaving your bank account and they'll want to see it land in your bank account in the uk right so you have to show that right so statements on the other side statement on this side as well without to show right so that's sort of the best way to do overseas transactions but be very careful because you need to show audit trail if not the bank the solicitors are likely to ask that question on how that money was built up and how it was transferred across right some people say you know you can't transfer money's bank to bank can we use cash generally cash is not acceptable but if you have different circumstances i suggest you speak to an advice on this for sure okay moving on to number four we got shares so what documents will you need to provide if you're going to use shares as proof of deposit yes can be a little tricky luckily you know most of the shares in the uk now if you're using a broker or a particular company by the platform you can easily download right so banks will want to look at those statements yeah and this is where it gets tricky because sometimes if you have statements banks may not accept that because they will want to see the cash come to your bank account right because if it's on your shares yeah that's going to say that the value can be different right so today's value might be tomorrow it might be different to tomorrow's value right so most of the time banks will say liquidate the shares like sell the shares off take the money and deposit it in the bank account and show it right again it really depends on the lender so if you have shares and you want to show that as a deposit i suggest you know speak to advisor because we can guide you based on which bank you're going because we can have conversations with the bank most of the time we do know what the banks require anyway right so because we do have the answers feel free to contact us so any other advisor who can guide you on this one thanks fifty and then last one is kind of really sort of talking about any alternatives for people who do not have sufficient proof of deposit what can they do yeah so i think traditionally most of the time you need a 10 deposit right but what generally happens is sometimes people fall short of this deposit and you know they don't have you know family assistance and things like that where they can't make up the money right there are some schemes out there which may help you right this can be alternatives i'll take something like a lifetime isa right so if you do lifetime isa there is a contribution from the government that's about 25 they contribute you know don't miss out on that right so if you're short of money that may be a way of collecting money right so don't miss out on those opportunities but just remember within isa you have to have it open a year before to use it so it might not be a last minute kind of thing but definitely if you plan yeah that's right i mean a lot of people you know who come to us they plan in advance i mean i'm working with a client just now buying a property we've been talking about it for the last couple of years right so it's just come to that stage where he's now saying okay i've got everything that i need let's go for it so for most people it's like that and i know some of our subscribers have sort of been following us for a while as well and especially on this subject right first time buyers right so that's one thing there are other schemes out there you don't have a 10 deposit things like have to buy right so help devices love this game right for people buying new properties you just need a five percent deposit in most cases right if the numbers add up your affordability works five percent is enough the government gives you 20 right as a part of the deposit that makes up 25 deposit right so those are rules that you can take right so that's helpful and also there is a government guarantee scheme where five percent mortgage is out there as well so that is out there for people who want to use it and the banks have also followed suit you know again but the government's trying to do some banks are not part of that scheme but they are offering five percent deposit schemes so those can be helpful for people who are little short of their deposit that can be used as an alternative right one which is sort of gaining popularity is the one i just like talked about a little bit more there's something called a joint borrow assault propriety scheme right so with that sometimes you might still have a smaller deposit if your affordability doesn't work you can get a parent or somebody else who sort of have to join the mortgage with you to help you get the markets right so that is another solution you have so that might be an option for you recently we did two transactions where parents were sort of buying properties for their kids who are going into university right so parents helped with the mortgage kids weren't earning too much but obviously you know that they will be earning much higher in future but they need this joint application the property is purchased on the child's name as the sole proprietor but it's a joint application and obviously you know you don't get additional stamp duty either right so that's the beauty of the scheme right so you could use a scheme like that as an alternative to help you with the deposit right and sort of good news is uh some of the lenders are now willing to even give up six times your income right as uh income multiples if you want to do a mortgage so that could be alternative to your deposit right so you know in the past most lenders used to stick to about four and a half times your income but we are now finding lenders doing five and a half five times income and recently i saw six times income as well right so those can be used as alternatives you might have a small deposit but that could boost you right so there are a lot of schemes out there to help out especially the first-time buyers right so if you are interested please do get in touch with us or speak to another advisor we can help you on this definitely and guys we just want to reach out to you too please please please subscribe we're so excited we've nearly reached a thousand subscribers so please help us with this journey that'll be amazing so please hit the thumbs up and subscribe thank you again if d for some more great advice today i just wanted to put our regular reminder out there that these points may or may not be applicable to everybody so if you're unsure if they're suitable for you please do get in touch with a broker and if you don't have a broker i will leave rws contact details below as we are always more than happy to help a little reminder that as a mortgage is secured against your home or property it may be repossessed if you do not keep up with the mortgage repayments thank you for joining us again today we're back next week with another episode of let's talk money and mortgages have a great day stay safe and we'll see you again soon [Music] you