Need to know
A mortgage broker has warned that sometimes having the money isn’t enough
It wasn’t just about the money (stock picture)(Image: Iryna Melnyk via Getty Images)
First-time buyer rejected by lender despite £40,000 family gift for deposit
- A first-time buyer was rejected by a major high street lender despite having a £40,000 gifted deposit from family – worth 14.5% of the property’s value.
- The case has highlighted the unpredictable nature of mortgage lending, with some lenders refusing substantial family contributions even during a housing crisis.
- Broker Gaurav Shukla from Home Me Mortgages said his client, who earns £50,000 annually, was turned down for a £275,000 property despite having no credit issues. “I was extremely surprised by this decision, as 14.5% is by no means a small percentage at a time when many people are buying with just a 5% or even no deposit,” he said.
- The client then tried adding £20,000 of his own savings to show commitment, reducing the gifted portion to £20,000, but was rejected again.
- The lender cited high loan-to-value ratios and claimed the buyer had only a “small personal stake” in the property, despite the £20,000 contribution.
- A rival high street lender immediately approved the mortgage with the full £40,000 as a gifted deposit, exposing the inconsistency between lenders’ approaches to family financial help.
- READ THE FULL STORY: ‘I’m a mortgage broker and my first-time buyer was rejected due to where deposit came from’