Proof of Deposit for Mortgage

When Do You Need Proof of Deposit for a Mortgage?

It's normal for mortgage lenders to ask you to prove where your mortgage deposit comes from as part of the mortgage application process. This can include signed contractual agreements, bank or savings account statements, a proof of deposit letter and any relevant certifications. What you need to provide will largely depend on how you're funding your deposit.

Savings

Many people, especially those buying their first home, use savings to fund their mortgage deposits. The savings generally accrue as money put aside from their income. The evidence usually required for this type of deposit involves 6 months' worth of bank statements that display regular payments coming from a valid income source and the money gradually growing in a savings account. If you have multiple savings accounts, you'll need to provide statements for each account.

Equity from Another Property

If you're funding your deposit through releasing equity from another property, you may not be required to provide proof if you're using the same lender. They will already have records of the transaction. However, you will need to prove that your income is enough to cover repayments on a larger mortgage.

Sale of Property or Other Assets

If you're using the money made from selling property or other valuable assets to generate a lump sum, you'll need to provide evidence of the transaction. This can be in the form of ownership documents and proof of sale. You'll also need to provide bank account statements that show the money coming into your account from the buyer or solicitor. You may also need to provide a copy of the completion statement if you've sold a property.

Gifts

You'll need to provide proof of a gifted deposit for a mortgage, such as a formal legal agreement confirming the money is a gift. This agreement, signed by all parties involved, must confirm the value of the gift and that the provider has no rights over the property and doesn't expect it to be repaid.

Inheritance

To use inherited money to fund your mortgage deposit, you'll need to get a certificate of deposit inheritance from the executors. The certificate should display the amount of money you've received as a beneficiary. You'll also need to provide a bank statement that displays the amount deposited from the executor or solicitor.

Overseas Savings

While it's possible to fund a deposit by using savings overseas, it's much easier for solicitors to trace the money if it comes from an established bank account. This helps them rule out any potential money laundering or fraud. You'll need to provide documentation similar to that of a UK savings account, showing regular payments from traceable sources.

Gambling Winnings

Some mortgage lenders will allow you to use winnings from gambling to fund a mortgage deposit. You'll need to provide a receipt detailing where you won the money and how much, and a bank statement that shows the payment made into your account. You may find it difficult to provide adequate proof if the winnings were paid in cash.

Compensation Settlement

If you've been awarded compensation and want to use it for your deposit, you'll need a copy of the letter confirming the compensation award from a solicitor or court. You'll also need to provide a copy of your bank account statement, showing the money received into the account from the court, solicitor, or third party.

Sale of Shares

To fund your mortgage deposit with proceeds from the sale of shares, you'll be required to provide a copy of the share release schedule and a bank account statement with details of the money transferred to your account.

Cash

While you may have a legitimate explanation of how you acquired a large sum of cash for the deposit, you may find it difficult to get it approved by lenders if they can't trace its source.