A Gifted Deposit is a sum that the seller usually offers against the property’s purchase price for the buyer’s deposit. It is an incentive that many modern conveyancing procedures are introducing to help first time buyers. This effectively means the buyer will avoid having to pay a deposit for their new home.
Some lenders disapprove of Gifted Deposits because they prefer to see financial commitment from the purchaser. Many solicitors are obliged to report a Gifted Deposit to the purchaser’s mortgage lenders, who may decide to alter their terms and conditions. A buyer failing to report this incentive is committing a major offence and could be accused of committing mortgage fraud.