One of the first things your conveyancer is likely to ask about is your Source of Funds.
For many clients, this can sound like legal jargon, and it's completely understandable to wonder exactly what it means.
You may have spent years saving for your deposit, received money from a family member, sold another property or built up savings through regular income. Whatever the source, your conveyancer needs to understand where the money for your transaction has come from.
This isn't because we doubt you. It's because the law requires us to ask.
The Short Answer
Source of Funds simply means where the money you are using for your property transaction has come from.
As a regulated law firm, we must understand how you have obtained the funds being used to buy your property or pay associated costs. This helps us comply with Anti-Money Laundering regulations and protects everyone involved in the transaction.
The Explanation
Every property transaction involves money changing hands, often significant sums.
Before we can proceed, we must be satisfied that the funds being used are legitimate and that we understand their origin.
Depending on your circumstances, your Source of Funds may include:
- Savings built up over time.
- Proceeds from the sale of another property.
- An inheritance.
- A gifted deposit from a family member.
- Employment income or a bonus.
- Investments that have been sold.
- Pension withdrawals.
- Business income.
Providing Source of Funds information doesn't usually mean producing years of financial records. Instead, we'll ask for enough evidence to demonstrate how the money has accumulated or become available for your purchase.
Sometimes this is straightforward. Other times, where funds have come from several different places or over a long period, we may need to ask additional questions or request further documents.
Our aim is simply to understand the journey your money has taken before it reaches your property transaction.
Common Examples of Source of Funds
| Source | Evidence We May Ask For |
| Savings | Bank or savings account statements |
| Sale of another property | Completion statement from your previous sale |
| Inheritance | Estate accounts, solicitor's letter or bank statement |
| Gifted deposit | Gift letter and evidence from the person making the gift |
| Investments | Investment statement and evidence of sale |
| Pension | Pension statement or withdrawal confirmation |
| Bonus | Payslip or employer confirmation |
The documents required will depend on your individual circumstances.
Common Questions
Will I need to provide every bank statement I've ever had?
No. We will only ask for information that is relevant to understanding the funds being used for your transaction.
What if my money has come from more than one place?
That's perfectly normal. Many purchases are funded by a combination of savings, gifts, mortgage funds and sale proceeds. We'll simply ask for evidence of each source where appropriate.
What happens if I can't provide the information straight away?
Let us know as soon as possible. We can explain what is needed and discuss whether alternative evidence may be available. Providing the requested information promptly helps avoid unnecessary delays.
Is this information kept confidential?
Yes. Any financial information you provide is handled securely and used solely for the purposes of your transaction and our legal and regulatory obligations.
Top Tip
If you're planning to buy a property, try to keep the money you're using in as few accounts as possible before instructing your conveyancer. A clear financial trail often makes the verification process quicker and simpler.
Did You Know?
A mortgage offer is not considered your Source of Funds. Your lender will provide the mortgage advance, but we must also understand where your own contribution to the purchase has come from.
Common Misconception
"Source of Funds means how much money I earn."
Not necessarily.
Source of Funds is about where the money for this particular transaction has come from, not simply your salary or overall financial position.
The MA Lawyers Approach
At MA Lawyers, we'll always explain why we're asking for financial information and only request documents that are relevant to your transaction.
We appreciate that discussing finances can sometimes feel personal, so we'll guide you through the process with sensitivity and explain what is needed at each stage. Completing these checks early helps avoid delays later in your transaction.
Related Articles
- Why Are You Asking Me for So Much Information?
- What's the Difference Between Source of Funds and Source of Wealth?
- What Is a Gifted Deposit?
- When Should I Transfer My Money?
- What Is a Mortgage Offer?