A Guide to Deposits

When you're applying for a mortgage, one of the key things your lender will need to see is proof of deposit — this is the money you're putting towards your property purchase.

But it’s not just about showing you have the money. Due to anti-money laundering regulations, lenders and solicitors must see exactly where the deposit has come from, especially when larger sums of money (typically over £5,000) are involved.

At J Finance, we’ll guide you through what’s needed and help you get your paperwork in order from the start — but here’s a quick overview of what to expect.

💷 What Counts as a Deposit?

Your deposit can come from a few different sources, such as:

  • Personal savings

  • Gifted funds (e.g. from parents or family members)

  • Sale of another property

  • Inheritance

  • Investment withdrawals

  • Loan - please note this is something that very few mortgage lenders accept so please talk to us before taking any borrowing for a deposit

Each source requires specific documents to satisfy both your lender and solicitor.

📑 Documents You’ll Likely Need

1. Savings from income

If your deposit has built up over time through regular savings, you'll need to show:

  • Bank statements covering at least the last 3–6 months although longer periods can be requested

  • A clear audit trail showing how the savings were accumulated

Top tip: Avoid moving money between accounts right before submitting your application — this can complicate the paper trail.

2. Large lump sums (over £5,000)

Any recent high-value transaction (usually £5,000 or more) will need to be explained and evidenced. This could be:

  • A bonus from work

  • A loan repayment

  • A sale of assets (car, shares, etc.)

You'll need to provide:

  • Documentation of the source (e.g. sale invoice, bonus letter, legal documents)

  • Bank statements showing the transaction in and out

3. Gifted deposits

If someone is giving you money towards your deposit, you’ll need to:

  • Declare the gift to your broker and lender

  • Provide a gifted deposit letter from the person gifting the funds (we’ll provide a template)

  • Show ID and proof of funds from the donor (such as bank statements)

The person gifting the deposit must confirm:

  • The money is a gift, not a loan

  • They won’t have any legal interest in the property

  • They are not expecting the money to be repaid

🔍 Why So Much Paperwork?

Lenders and solicitors are legally required to comply with anti-money laundering (AML) checks. These checks are in place to:

  • Prevent criminal activity

  • Ensure all funds are from legitimate sources

  • Protect you and the property market from fraud

Even if it seems over the top, it’s all about keeping the process secure and transparent — and we’ll help make it as smooth as possible.

🚫 Common Pitfalls to Avoid

  • Mixing deposit money across multiple accounts – this can make it harder to trace the source

  • Receiving cash deposits – lenders generally won’t accept these unless fully documented

  • Withholding info about gifts – this can lead to delays or even rejection of your mortgage offer

  • Transferring funds at the last minute – always speak to us first

🤝 How J Finance Helps

We’re here to help you tick all the boxes from day one. We’ll:

  • Review your documents before submission

  • Explain exactly what your lender will want to see

  • Provide templates and checklists (like gifted deposit letters)

  • Liaise with the lender and solicitor on your behalf

Questions?

Don’t worry if this feels a bit overwhelming — that’s why we’re here. Just give us a call or drop us a message and we’ll talk you through what’s needed for your specific case.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.