You need to be able to show how you accumulated your deposit. For most people, this is easy as they have a monthly ISA direct debit set up or they have received a gift from a parent or family member.
Deposit funds can originate from many sources the most common being:
- Savings – you send money to a savings account frequently
- Gift – An immediate family member gives you a gift (this must be a close family member “Bank of Mam and Dad”)
- Inheritance – You have been left money
- Equity from the sale of a property – If you are selling a property and using the equity towards the deposit
In all instances you will be expected to prove where the funds came from.
Your giftors will be asked to sign a gifted deposit form and provide bank statements showing the gift as well as ID.
Proving your deposit is a regulatory requirement and is part of the firms Anti Money Laundering Procedures.
It is extremely unlikely that the lender and/or your Conveyancer will accept a deposit that can’t be traced back to its source.