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How to Provide Proof of Deposit for a Mortgage

Find out what lenders consider an acceptable source of deposit, or save time and money by getting started with an expert broker

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: May 13, 2022

Proving where your deposit came from is an essential part of the mortgage application process, but it isn’t always straightforward. Depending on where your funds originated, you might find it tricky to produce the evidence you’ll need to convince the lender to approve you for finance.

If that’s the case, don’t worry. There are ways and means to prove what some lenders consider ‘non-standard’ deposit sources, and in this guide, we’ll explain how. Here, you’ll learn how to prove various deposit types, how a broker can help you with this, and more.

Read on for more information or just straight to a topic on the menu below…

How to prove your mortgage deposit

The way you’ll need to evidence your mortgage deposit will depend on where it came from. For traditional deposit sources like personal savings, most lenders will want to see the money building up in your bank account over a period of time, usually six months or more.

Below you will find an overview of the evidence you’ll need to produce for each deposit type…

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Personal savings

The best evidence you can provide for personal savings is at least six months’ worth of bank statements which display regular in-payments from your employer, pension or any other legal source of income, and the money slowly growing in your bank or savings account.

If you have multiple bank accounts and are planning to use capital from all of them for your deposit, you should provide six months’ statements for each of these accounts.

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Selling property or other assets

If you’ve received a lump sum from a sale of a property or other assets such as a car, boat or other legal sources, you should provide evidence in the form of ownership documents, alongside a copy of your bank account statement showing the proceeds from the sale.

If the cash is coming from a property, you should also provide a copy of the completion statement once the sale has been finalised.

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Equity released from a property

If you are releasing equity from an existing property to fund the deposit for a second one, you will not be required to provide evidence if you’re negotiating a larger mortgage to cover both properties with the same lender. They will already have full visibility of your situation.

They will, however, require proof that you’re able to afford the repayments for a larger mortgage, which they will assess by calculating your debt-to-income ratio.

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Inheritance

A certificate of deposit inheritance will need to be provided by the executors if you’re funding a deposit in this way.

This document will need to state how much you are receiving as a beneficiary, and you will also need to provide a copy of your bank statement that shows the sum has been transferred from the solicitor or executor’s account into your own bank account.

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Gifted deposits

For any form of gifted deposit, your solicitor will require a legal agreement which confirms that the money being provided is a gift that will never need to be repaid, and that the donor has no rights over the property. It should also detail the value of the gift, and be signed by all parties.

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Overseas savings

Provided you are using funds which come from an established bank account or similar overseas account, it is far easier for solicitors to trace the origin of the cash and rule out any suspicions of fraudulent activity.

Proof can be provided in a similar way to personal savings in the UK, with the buyer providing copies of a bank/savings account statement displaying regular in-payments for savings (the sources of which must again be traceable).

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Gambling winnings

If you’re using gambling winnings as a mortgage deposit you will need to provide a receipt confirming your winnings and the amount, as well as a copy of your bank statement showing the incoming payment from the gambling company.

If your winnings were in cash, however, you will struggle to prove the source of your mortgage deposit which could severely inhibit your chances.

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Cash

For the handful of solicitors that will accept cash, you are more than likely to find that there is a limit to the amount they will accept (typically no more than a few hundred pounds).

If you have a large sum of cash in your account which hasn’t been sourced by any of the options we’ve covered, either speak to a solicitor or contact a mortgage broker.

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Important:

If you’re still unsure how to evidence your deposit or think you don’t have enough proof for the lender, speak to a mortgage broker. They can help you prepare the right paperwork and match you with a lender who is flexible on deposit types and more likely to approve you.

How likely your deposit source is to be accepted

The tables below reveal how likely it is that your mortgage deposit will be approved based on its source. We’ve categorised each deposit type to reflect how widely accepted they are…

Widely accepted deposit sources

Deposit Source Mortgage Lenders’ Stance
Personal Savings Every lender is happy with a deposit funded by personal savings, although some may require proof in the form of bank/saving account statements so there is evidence of the increasing balance over time
Proceeds from the sale of a property Usually there are no problems with this, as long as the property proceeds are not undercharged by someone else. There must also be evidence of these funds in your bank account at the time of completion
Equity released from a property This doesn’t tend to be a problem, but your mortgage lender will need evidence that you will be able to keep up the repayments for a larger/second mortgage if you’re buying another property on top of the one you released the equity from
Inheritance Most lenders are happy to accept an inheritance funded deposit but will require a letter from the executor detailing the amount you are receiving, and evidence of the funds in your accoun
Gifted deposits from close family Lenders tend to be happy with gifted deposits from close family members such as parents, grandparents and siblings, and will require a signed legal agreement from all parties detailing the terms and value of the gift
The sale of other assets Deposits funded by the sale of assets such as cars, boats, valuable memorabilia, artwork, or anything else that is able to be sold legally are usually acceptable forms of deposit, provided it is legitimate and you can present evidence of the sale

If your mortgage deposit came from one of the above sources, you should have a wide range of lenders, rates and deals to choose from, based on the type of deposit you have alone.

That said, mortgage eligibility comes down to much more than just the source of your deposit. The amount of deposit you have, your income and your credit history will also be assessed, so it’s a good idea to speak to a mortgage broker before you apply to make sure you get the best possible deal based on all of these factors.

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Sometimes accepted

Deposit Source Mortgage Lenders’ Stance
Gifts from distant relatives While close family are not a problem, gifts from more distant relatives such as aunts, uncles, step-parents or cousins may be declined. Whether the person is related to you by blood can also impact eligibility
Overseas savings Deposits sourced from savings overseas can be a tricky one as it can be difficult for lenders to trace the origin of the cash and to confirm there is no risk of money laundering. Some lenders are more flexible. If, for instance, the funds come from an established bank account and can be legitimately traced
Gambling winnings Gambling funds may be accepted without any issues, but lenders may be hesitant if gambling is a regular occurrence. Some may want to examine your bank statements and deduct gambling income from your total available income, which may considerably impact affordability

If your mortgage deposit comes from one of these sources, the chances of being rejected or having to settle for a less favourable deal are usually higher. It’s a good idea to speak to a mortgage broker so they can help you offset this risk by matching you with the right lender.

Finding the ideal mortgage lender, first time, can help save you time as well as money due to your chances of landing a low interest rate increasing. It can also make sure you avoid negative marks on your credit report by minimising the amount of hard credit checks you’ll need.

Rarely accepted

Deposit Source Mortgage Lenders’ Stance
Gift from friends Gifted mortgage deposits from friends or family friends are regarded as less trustworthy than a gift from close family. Due to the associated risk, very few mortgage lenders will consider approving this, but there may be a few that will, and it will help your case if you contribute some of your own cash to prove your investment
Gift from an employer Gifts from a third-party such as an employer are not usually accepted due to the risk of money laundering and fraud. For lenders that will consider accepting under these circumstances, expect extensive due diligence checks. These assessments will scrutinise the source of funds and may include ID verification checks on the donor
Personal loans Deposits sourced through taking out personal loans or other forms of unsecured borrowing (such as credit cards and overdrafts) are generally not accepted by most lenders because you’re borrowing money to borrow money, which won’t fill them with confidence about your financial position. Depending on your circumstances, however, a handful of lenders might consider accepting your deposit, including some mainstream mortgage providers
Cash Cash tends to be a big no-no from many lenders. Cash deposits into an account that cannot be traced generally cannot be used for a deposit, and can even taint the whole account, meaning that none of the money in it can be used for a property purchase

If your deposit source is one of the above, it’s vital to speak to a mortgage broker to boost your chances of mortgage approval. Without a broker, your chances of being refused for a mortgage or having to settle for unfavourable rates are very high.

Why do you need to evidence your mortgage deposit?

In the UK, every mortgage borrower must disclose the source of their deposit. Mortgage lenders and solicitors have strict anti-money laundering regulations and guidelines in place to ensure mortgage deposits are funded by legal, legitimate sources.

Where your deposit has been sourced from is a vital piece of information in the mortgage application process. You’re likely to have a mortgage application declined if your deposit originated from a non-approved source, so it’s important to be honest on your application from the offset to ensure everything goes through smoothly.

What’s more, you will also be asked for proof of the source of your mortgage deposit funds, and lenders and/or solicitors will carry out extensive checks to confirm the claims you have made about its origin.

Evidence of the source of your mortgage deposit comes in various forms, from a review of bank/savings account statements, signed contractual agreements, and particular forms of certification, to name a few.

Key takeaways from this guide

  • 01

    Some deposit sources are more acceptable than others:

    If you have what most mortgage lenders would class as a ‘non-standard’ deposit source, your chances of mortgage approval and landing a good deal could be far slimmer.
  • 02

    A broker can help you evidence your deposit:

    If you’re unsure how to evidence your deposit or think you might be declined because of a ‘non-standard’ deposit source, speak to a mortgage broker. They can help you prepare the right paperwork and introduce you to a lender who accepts unusual deposit types.
  • 03

    We can match you with the broker you need:

    There are brokers who specialise in helping customers with ‘non-standard’ deposit types, and that’s the kind of expertise you’ll need to boost your chances of success. Our free broker-matching service will pair you with a mortgage advisor based on your needs, circumstances and deposit type.

Call 0808 189 2301 or make an enquiry and we’ll match you with your ideal broker today.

FAQs

What’s the difference between an exchange deposit and a mortgage deposit?

Don’t worry, this isn’t something extra you’ll have to cough up. The exchange deposit is merely a part of the final deposit amount, payable at the point of exchange. It amounts to 10% of the property’s purchase price and is non-refundable in the event of the deal collapsing.

For instance, if you’re putting down a 15% deposit, you will initially pay 10% of it to serve as the exchange deposit and the other 5% upon completion. The only exception is if you have a 95% mortgage, in which case the full 5% deposit is payable at the point of exchange.

Do I need proof of deposit to get an agreement in principle?

It’s sometimes possible to get a deal in principle without proving where your deposit funds came from, but this a non-binding agreement and is by no means a mortgage guarantee.

You’ll need to prove your deposit after this point if you want a full mortgage offer.

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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in mortgage deposits
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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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