How To Show Proof Of Deposit For A Mortgage (2024)

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Proof Of Deposit For A Mortgage

Updated: December 11, 2023

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.

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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.

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.

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.

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.

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.

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.

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).

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.

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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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

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.

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

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, circ*mstances and deposit type.

Speak to a deposits expert

Maximise your chance of approval with a dedicated specialist broker