The purchase of a house is a big expense that runs into hundreds of thousands at a minimum in most cases. As a result, it is not a simple case of purchasing a house without any prior checks as money laundering is a serious offence. As a result, when you do find a house with Hammersmith estate agents, money laundering checks will need to be carried out.
So, when it comes to purchasing a property, there are some checks that you need to be aware that they form part of the process.
Proof of funds
There are two different reasons why an estate agent might ask for proof of funds, and they can be asked at two different stages of the process. Before you put in an offer, an estate agent might ask for proof of funds as they want to make sure that you do have a genuine interest in the property, although you don’t have to do this. However, once you are asked for proof of funds after you have put in an offer, they are not only making sure you have the money, but they are checking that you have not obtained the money through criminal activity. At this point, you have to provide proof of funds.
Providing proof of funds
There are several ways in which you can provide proof of funds, and this includes:
- Mortgage agreements in principle
- Bank statements showing your deposit amount
- Bank statements proving your cash amount
- Previous bank statements showing how your money has increased over time
- Proof of a sale of a property
- Proof that money was gifted from the individual who gifted it
- Evidence that money was left to you as part of a Will
- A receipt showing the sale of shares
As part of the process, you will also be required to provide a proof of ID. Therefore, you will be asked for proof of your identity and your current address, which is known as Due Diligence.
ID Proof – You will be expected to provide some of the following:
- Residence permit
- Current driving licence
- Tax notification from HMRC
- State Pension letter
Proof of address:
- Current tax bill
- Tenancy agreement from your local council
- Mortgage statement
- Utility bill
- Bank statement
In addition to this, your solicitor will also ask you for proof of where the money has come from. Therefore, when you do get asked to provide proof, make sure you provide it as soon as possible and do not avoid it as it is a legal requirement to prove how you obtained the money.
These checks are required by law and if they are not carried out, then estate agents, lenders and solicitors can all face significant fines and even imprisonment. However, it is worth remembering that estate agents and solicitors are separate entities so once you have shown proof to either one of them, you still have to show them to the other. Therefore, it makes sense to ensure you have all of your paperwork and proof in place, so you can find it when you need it.