House deposits?

Anybody else in the position of trying to save 1st house deposits?

Seems like a never ending task, but we spoke to a friend the other night, who is an IFA, that said you can get what's called a gifted deposit to make the initial amount needed much less.

Works like this - house is on for £180,000 so your 10% deposit is £18,000. However, very rarely do you pay window price, so whatever your offer is below the asking price, the difference can be counted towards your deposit. If you had an offer accepted at £170,000, then then you would have a theoretical deposit of £10,000 already, meaning you only need to save £8000 to get your 10% which is a much less 'impossible' target. On that basis, you would be paying 8k deposit and only borrowing £162k which for us, would be afordable. Will still take 18 months to save that, but it's not sooooo far in the future that you think it's not worth starting.

I thought I'd share it as I'd never heard of it before. But Mike said that's the difference between an IFA and going straight to a lender who can just say no. The IFA's know lots of different routes to getting there so it's not such an impossible dream!

I never thought a few years ago, that at this point in my life I'd be getting married, planning for kids and saving for a house deposit! It means I might finally have to start growing up!!! ;D


If anyone else is in similar situation, happy to pass on Mikes details and he may be able to help you out as well :)

Sounds very interesting!

I'm a bit of a stickler for tradition unfortunately - I managed to save £25k on my own for a deposit, and have paid off a further £10k since moving in 2.5yrs ago through VERY hard saving. Started saving for a house when I was very early 20s and stuck to being strict and careful with money for about 6 years.

Did effectively cause the breakup of a 5yr relationship mind you! She hated me saying "I haven't got any money left this month" when in actual fact I meant "..after having put my usual amount in my house fund"

i wish I had been - I'm a late starter for saving, so gets harder with all the other outgoings. Jen is good though, she always has been so she's [trying to] keeping me on the straight and narrow! lol

I managed to buy my first house 2 and a half years ago (when the recession was first hitting hard I guess). Sold a car I had for 6K and got an old banger in PX. That was my deposit for a house sold to me at 94K - LTV of 95% resulted in an extortionate interest rate (7.14%) When I made the decision to buy it took me less than 6weeks to decide on the house, sell the car, sort the mortgage and move in!

I don’t really know much about the gifted deposit you mention, but the lender will always send a surveyor out to value the property so you are in their hands really (just remortgaged myself so I know!)

The best advice I can give - obviously save as much as you can as the rates and deals will open up a hell of a lot more.

Any fees you have to pay associated with surveying, arrangement fees, solicitors and even moving property if renting - take out a credit card with an interest free period - there are lots out there at the moment with 15 months interest free so you just pay the minimum each month and extra when you can. Just make sure you can pay it off before the offer ends. If you bolt these prices onto the mortgage it will count against you LTV ratio (loan to value)

Don’t fall in love with the house you are looking to buy - you will get a much better deal if you don’t as you won’t get clouded vision and offer more than you could potentially buy it for (it is a real buyers market out there and will be for the foreseeable future) Buy somewhere that needs a bit of tidying up and TLC and you will make your money back. I know as like I said I brought mine for 94K 30 months back and just had it revalued by a new lender and estate agent and the prices came back at 120K and 130K respectively which now means my LTV is at worst 76% and at best 70% which has allowed me to remortgage on a rate of 3.39% (a BIG difference). Initial hardship is worth it if you can put up with it and ride it out.

Also, something everybody misses and doesn’t think about at the moment with ISA rates being so crap and low atm - put your mortgage savings into bonds - I would put money on anyone making more money from bonds than ISAs atm. You can access all the money in bonds just as quick as you can from an ISA!

Cheers.

The gifted deposit works because you're buying the property for less than it's market value. If it's valued at £180k, and you get them to accept an offer of £170k, then it means the house is still worth 180, you just got a bargain. And the money you saved goes towards your deposit.

It might not be for everyone, but it's worth asking about if you're looking at the moment and can't afford a big deposit. The trouble is, with pets, the need of a spare room as a home office, and the plan for kids in the near(ish) future, then we need a 3 bed house and so we would be looking at around £170-£180k where we want to live.

Interestingly, I moved here from Cheltenham, where the same property would cost you £300k+!!!! Wiltshire is VERY cheap to live in!

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Originally Posted by Dabz

Sounds very interesting!

I'm a bit of a stickler for tradition unfortunately - I managed to save £25k on my own for a deposit, and have paid off a further £10k since moving in 2.5yrs ago through VERY hard saving. Started saving for a house when I was very early 20s and stuck to being strict and careful with money for about 6 years.

Did effectively cause the breakup of a 5yr relationship mind you! She hated me saying "I haven't got any money left this month" when in actual fact I meant "..after having put my usual amount in my house fund"

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What a result Dabz - this ought to be a lesson for all young men.
You finished up with a House and a Hazel ;)

G :)

I reckon you came out tops with such a lovely HAZEL
XXXX

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Originally Posted by Squashed_Fly

The gifted deposit works because you're buying the property for less than it's market value. If it's valued at £180k, and you get them to accept an offer of £170k, then it means the house is still worth 180, you just got a bargain. And the money you saved goes towards your deposit.

It might not be for everyone, but it's worth asking about if you're looking at the moment and can't afford a big deposit. The trouble is, with pets, the need of a spare room as a home office, and the plan for kids in the near(ish) future, then we need a 3 bed house and so we would be looking at around £170-£180k where we want to live.

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I understand how it works but do not know how lenders look on it and have not heard of any friends using this method. As you say its definatly workth asking.

Just bear in mind that because its on for £180 doesnt mean it is actually worth that. Example being the estate agents valued mine at £130 but the lenders valued it at £120 so if i was looking to buy it from someone else selling it at £130 i would have to offer £120 or below for the lender to agree to the purchase/mortgage and lower still to benefit from the gifted deposit.

Wiltshire is most definatly a cheap area to move compared to others

mm - as a conveyancing solicitor, I know that the lender's are not happy with these arrangements unless fully disclosed to them. Under the CML rules (Council of Mortgage Lenders ) rules, the price on the contract must be the price you pay and any incentives should be reported. Sure there are might be unscrupulous solicitors who might take your money and not report the fact to the lender but I certainly wouldn't risk my practising certificate on it. No chance. The lenders will lend against what you are paying not against market value. The value is almost insignificant. The paperwork must reflect the true price (eg if you are paying £170k the contract MUST state £170k and any 'gifted deposits' must be reported to the lender (if the solicitor is worth their salt) Not sure this would work to be honest froma legal perspective but I'm willing to have a debate about it.

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If it's valued at £180k, and you get them to accept an offer of £170k, then it means the house is still worth 180, you just got a bargain.

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Err no, complete fallcy.
If the best price it fetched on the open market was £170K then that's what it's worth.
It's not worth £180K just because someone says it is.

I am with Star on this.
The lender wants to have the correct LTV (loan to value). The reason why they say 90% max is because that protects the security for their loan and reduces their risk if there are house price falls.
The price must be reported corrected.

If it's all above board then fair play, but if something is being reported incorrectly to the lender then it's fraud.
If the wrong price is reported to the land registry for stamp duty purposes then that may be an issue too.

I am not sure if this is legit, but I certainly don't think you can buy a house for £170K when it's worth £180K unless the seller is in distressed circumstances.
The only time people sell their stuff for less than it's worth is if they have an issue.
Paying less than asking price is normal, but the house is still only worth what you paid, not what someone claimed they coudl get for it, but didn't. If they truly believed it was worth £180K why would they sell it to you for £170K???

Also - even if you had a vendor who was willing to agree to put £180k on the paperwork and 'gift' you a deposit of £10k (I can't ever imagine any of my clients agreeing to do something like this), but for argument's sake...lets say you know the vendor and as a favour they agree to a contractual price of £180k but will gift you a deposit of 10k....this MUST be reported to the lender. The lender will then know you are not paying £180, but 170 and I am pretty sure they will lend against that and will be probably be questioning why the vendor is gifting that amount to you!! If its not reported then = mortgage fraud. Which ever way you look at it, I don't think it would work from a legal perspective.

I'm the first to admit, having never bought a house, that I know very little so a debate is pointless.

But it it works, it's legal, and it gets us on that 1st rung of the ladder, then I'm game :)

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Originally Posted by Squashed_Fly

I'm the first to admit, having never bought a house, that I know very little so a debate is pointless.

But it it works, it's legal, and it gets us on that 1st rung of the ladder, then I'm game :)

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The only point I want to make is that I dont think it does work..withouth speaking to your IFA friend I am limited in what advice I can give but it verges on the edge of mortgage fraud from what you have said and I would avoid it at all costs.

Gifted deposits are not fraudulent when disclosed and the real purchase price used. However, increasing the value of the property to hide the gift and recording that as the purchase price is fraudulent.

If it's not legal then it won't get past solicitors unless they are in on it as well.

sounds to me there's no easy way of purchasing a property other than saving hard for a decent sized deposit

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Originally Posted by Dabz

sounds to me there's no easy way of purchasing a property other than saving hard for a decent sized deposit

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+1

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sounds to me there's no easy way of purchasing a property other than saving hard for a decent sized deposit

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Back in 1991 we bought a house with no deposit (I was just out of uni so had little in savings), with an "equity share scheme" from the builder.
We bought 80% of the property with a mortgage.
The builders owned the other 20% and we would have to buy that off them within 5 years for 20% of the value (min was the purchase price).

Unfortunately house prices went down.
We were both working so we saved up and paid off the charge (in fact we negotiated a 9% discount for paying early) but we would not have been able to put it on the mortgage as the house price had fallen by over 1/3rd (from £70K in 1991 to £45K in 1996).
We could have been in a much worse position and some people were. Some people needed to relocate for work but couldn't take on the money they owed.

When I see all these schemes coming out I do wonder whether we are in for a correction in property prices when the public sector cuts kick in.
I think this is a sign that builders/bank are trying to keep the market going when ultimately continually rising house prices is unsustainable.

Disagree Dabz - there's no 'easy' way so to speak, but there are different routes than just going to your bank and asking for a mortgage.

With Jen being a teacher,we have acess to a whole range of mortgage products and low rate mortgages through keyworker schemes, plus there is the Teachers Building Society who will still do 0% deposit mortgages for teachers. There are also part buy-part rent, shared ownership etc.

Lots of ways to make it easier to take that first step :)

Star is right in that if you do anything illegal, then it's a criminal act. But GDs aren't illegal. They're just one of lot's of ways round that first hurdle if the circumstances are right. If you imagine the scnario where you know your house has a market of value of X, but you want it shifted fast (perhaps you need the money, can't keep up the payments, moving abroad etc), then you would accept Y for it for a quick sale. We have no chain so we would be ideal candidates to look for that kind of deal.

Banks happy that the house is worth more so LTV is still fine. Buyer, seller, solicitors & surveyors are all in on the transaction so all good.

It's not right for everyone, but personally, I would rather save the £10k (or whatever it is) and use that towards our childrens futures etc so it's worth seeking out those properties.

If you've gone the traditional route, then I guess it's a bit frustrating to see people benefitting from loopholes in the system, but that doesn't mean it's wrong. So long as you're happy with your house, and the deal you got, that's all that's important. I just thought I'd share it as others may benefit from knowing about a possible option. If it's not for you, then you need not worry! 8-)

I'm no expert so won't hand out advice, but from personal experience I have been left with the conclusion that simple is best. On two occasions I have taken out mortgages which seemed fine at the time and a really cracking deal only to find that when personal circumstances change they suddenly are not so good anymore. In one case I was hit with interest rates going up to 15% (thanks Maggie) and with the other I was mis-sold a mortgage capital payment plan by a large and very well known financial institution.

With the high interest rates I had to just take that on the chin but it took 7 years to recover financially. The mis-selling saga ended up as a civil action that I won and at least got financial recompense for.

The length of time you will have a mortgage for almost certainly will include some form of major change to your personal circumstances such as divorce, redundancy, children, illness etc as well as the economic and financial condition of the country we live in. You never think it will happen to you...until it does. Luckily I'm out of all that now...wish I had had the benefit of hindsight at the time of making the biggest single financial decision of my life.

I started saving for my house when i was 20, just after i bought my ninja so my savings at the time were zero lol. I did all the over time i could, didn't go out every weekend after football like i had been. after 2 years i had managed to save 14k and 2 years ago yesterday i moved into my house, but as i wanted a largeish back garden and a garage i had to compromise and ended up moving further away then i wanted to, but as i wanted to buy a house and get on that first step of the property ladder so badly it had to be done. If you really want to buy your own place, no matter how hard it is, or how long it takes to save up then you have to do it, no if's or but's cus you will never get there. I'm 24 now and some of my mates havn't got any motivation to move out of there parents yet cus it's to hard to save according to them, but as people on here have proved it's not something new. :)

I wish you all the best with your hopes and your housebuying but I'm afraid I think it's all a big con (possibly quite a legal one).

If properties are genuinely available below market value, they tend to go to auction where they get picked up by genuine professional investors/landlords.
Any that don't go to auction will be picked up by the estate agents or the professional investors who will pay the estate agents a backhander I'm sure.

I'm sorry if this sounds harsh but I think it's naive to think you can easily just pick up a property below market value when there are people on the inside who will reserve the bargains for themselves and their mates.
If it was eay to just "flip" a house for £10K and it was genuinely worth £10K more then there are plenty of investors with a lot more cash than you have and with relationships with the agents.

Sorry I think it's a con (or legal loophole) and I don't think you are getting the genuine bargain you think you are.

But I wish you all the best with it.

As its been 20 years since I last bought a house I don't understand this gifted deposit thing. Back in the olden days you agreed the deposit to be paid with the vendor - it was something you mutually agreed and had nothing to do with the mortgage or house value whatsoever. In my case I agreed with the vendor to pay a 5% deposit which was based on the agreed sale price (not the advertised price or valuation). I then took out a mortgage to cover the balance once I had put my savings into it. The mortgage lender then valued the property to make sure their asset was a worthwhile thing to invest in etc etc. should I default on the mortgage. This risk on their part obviously varies according to the size of the mortgage but they based it purely on their valuation of the property minus their mortgage amount. They never told you their valuation on the property just that they considered the mortgage to be less than it's value and since they are the prime charge on the property i.e before you, thats all they cared about.

Don't get me wrong SF - I didn't "just go to my bank and ask for a mortgage", both times (mortgage and remortgage) I used an IFA who is bloody brilliant, and I shopped around and did my own research. My mortgage costs me £290 a month which didn't happen by accident

So, having done it twice, and having ended up in my late 20s with 30% equity in my house, I stand by my opinion that the only easy, safe, reliable and relatively risk-adverse way of getting a mortgage that you can afford month on month is by saving, and saving a lot

Dabz is right.

There is another problem with this scheme. The purpose of the deposit is to make you save.
Savings makes a massive difference to your wealth.
After 20 years or so you can own a house, but it doesn't happen by accident or through fancy schemes.
I'm sure there are people at WB who have a lot of equity in their home and have a decent pension fund and have six figures in assets. You won't be able to spot them though because they probably aren't the ones flashing the cash.
Did the "haves" get on some clever scheme? no they just saved and over a period of time it makes a massive difference.

The problem with your scheme is that whilst short term it might get you on the ladder quicker which might be attractive, it doesn't change the fundamental fact that if you want to be wealthy long term you need to save and whilst you might be putting that off until you've got the house, believe me it only gets harder once you've got a house and then kids.

I recommend reading this wll known book

http://www.amazon.co.uk/Millionaire-...=1H57N0SMVKJWE

Do some more research before you make a decision that could affect you for a long time.

Hope it all goes well.

Saving is great, if you can afford to do it and have enough disposable cash to save £18,000 in the the time needed to do it before we don't have enough working years left to pay the mortgage at an affordable rate.

I get you might have your thoughts about the schemes available, but with the greatest respect, unless you have the amount of years experience in the industry that our IFA has, I will probably listen to his advice about what is the best option for us at this point in time....

if you don't have the disposable income to save, how will you cope when interest rates rise, along with council tax, utility bills etc, and when you have to save ready for remortgaging at the end of your initial fixed term?

I have been struggling with this term "Gifted Deposit" but having reread the posts I am wondering if thats just sales patter for a mutually agreed reduction in the deposit amount between buyer and vendor?

So, if the asking price is £180K but the agreed contractual price is £170K, if the deposit was 10% the required deposit goes from £18K down to just £17K to find. However, unless things have changed, there's no hard and fast rule over the deposit amount - its negotiable. So, what I think your IFA is suggesting, as part of the sale negotiations, is getting the vendor to agree both to a reduced price from the asking price plus a reduction in the deposit percentage to 5%. That would give you a deposit to find of £8.5K instead of the £17K, saving you £8.5K to find at exchange of contracts. The balance of the purchase price would then be £161.5K which is paid on completion made up of the balance of your savings and mortgage.

SF - is that what your IFA is proposing?

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Saving is great, if you can afford to do it

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If you don't have any spare income, then how will you afford the extra costs of ownership?

The basic point is that if you can't save for a deposit then can you afford the house?

Have you sat down and worked out both how you are going to afford the inital costs (stamp duty, removals, legal fees, curtains etc.) and the ongoing costs of ownership (insurance, repairs, maintenance).

If you have then great.

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I am wondering if thats just sales patter for a mutually agreed reduction in the deposit amount between buyer and vendor?

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It cannot just be an agreement between buyer and vendor the lender/surveyor have to agree to the lending too.
In general you can't get a mortgage of £162K for a £170K value because that's higher than a 95% LTV which is risky for the lender.
So the mortgage lenders surveyor has to agree that the property is actually worth £180K so it's a 90% Loan to Value.

Its potentially legit although genuine "below market value" properties are usually snapped up by estate agents and their circle of friends.

If you were an estate agent and came across something genuinely 10K cheaper, you'd tell your friends, family and mates wouldn't you.
Perhaps this is a genuine tip off situation and if it's affordable there is no issue, but alarm bells ring if people claim to have no spare cash. Owning costs money beyond the immediate mortgage and you don't need to be an IFA to know about the practicalities of monthly household budgetting.

Hope it goes well for you when you do save enough , i dont earn enough to buy , and if i did dont think id put a morgage around my neck,work front is far far to unsatble to have a 25 year debt .Just the way i see it ,and i like my flat lol . :)

If I were an FTB now, I'd wait for house prices to fall when public sector job losses kick in, although I know it's easy to speculate when your not actually in that position.

I bought my first house in the early 90's
I saved a deposit and at that time bought a new house.
I bought a new house where the builder paid my deposit £3.5 k - result!
I then used the money that I had saved for furniture, gardens and all the household appliances that I needed to kit my house out with.

If you are interested in a new build ask then if they are willing to pay your deposit - builders are desperate to sell at the moment.

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Originally Posted by Ducatista

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I am wondering if thats just sales patter for a mutually agreed reduction in the deposit amount between buyer and vendor?

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It cannot just be an agreement between buyer and vendor the lender/surveyor have to agree to the lending too.
In general you can't get a mortgage of £162K for a £170K value because that's higher than a 95% LTV which is risky for the lender.
So the mortgage lenders surveyor has to agree that the property is actually worth £180K so it's a 90% Loan to Value.

Its potentially legit although genuine "below market value" properties are usually snapped up by estate agents and their circle of friends.

If you were an estate agent and came across something genuinely 10K cheaper, you'd tell your friends, family and mates wouldn't you.
Perhaps this is a genuine tip off situation and if it's affordable there is no issue, but alarm bells ring if people claim to have no spare cash. Owning costs money beyond the immediate mortgage and you don't need to be an IFA to know about the practicalities of monthly household budgetting.

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Maybe I'm getting the wrong end of the stick here. I'm only talking about the deposit thats payable at time of exchange. Most vendors ask for 10% deposit but I have only ever paid a 5% deposit through negotiation. If the asking price is £180K and the agreed purchase price is £170K, the properties value is £170K. I can't see any surveyor valuing it above £170K under any circumstances unless they are crooked. Then the deposit has to be paid at exchange of contracts. In my experience this is a negotiated amount and nothing to do with the lender. All I'm suggesting is if the vendor was originally asking for a 10% deposit i.e £17K, the buyer could negotiate a 5% deposit instead making only £8.5K to find at exchange. The buyer then has to find the balance of £161.5K by whatever means they can making the final total of £170K. The buyer pays the £170K whatever, its just a smaller amount to find as cash for the deposit.

The mortgage lender will decide whether the loan amount is acceptable to them but that should be known prior to exchange so if they are not prepared to lend that amount for whatever reason then the deal falls through anyway.

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I can't see any surveyor valuing it above £170K under any circumstances unless they are crooked.

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So you don't think properties EVER sell below market value when people are desperate for some reason or other?
I think they do sometimes come up however I think they would normally be referred to property investors who give the estate agent a commission for the infomation.

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In my experience this is a negotiated amount and nothing to do with the lender.

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The cash deposit is between buyer and seller.
The equity stake the lender requires for their LTV maximum is a matter for the lender.

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The buyer then has to find the balance of £161.5K by whatever means they can making the final total of £170K.

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Providing you can get a 95% LTV mortgage yes you could do that.
But a 90% mortgage on a £180K house selling below market value would be a better deal if genuine and I believe what SF is describing.
We are not in a position to judge whether the property is genuinely below market value or not, but I share your concerns.

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The mortgage lender will decide whether the loan amount is acceptable to them

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Agreed.
They will send a surveyor out and decide what it's worth. If it doesn't meet their LTV criteria they won't lend. We have already expressed concerns that it simply won't work, but the IFA clearly carries more weight that our concerns.
Let's hope fees for surveys etc. aren't wasted.

I think in a roundabout way Lisa we are sort of agreeing with each other. I'm just trying to understand this "Gifted Deposit" term which I have never heard of before, who it is doing the gifting and where it sits in the transaction?

If you go back to SF's original post, he's saying that the difference between the asking price and sale price of £10K can somehow be taken off the deposit amount as a "Gifted Deposit".

All I see is a sale price of £170K, a deposit of £8K and a balance of £162K which adds up to the full value of £170K. So, where is this theoretical saving of £10K fit into the math because I can't see it anywhere? In my simple mind all I see is that the vendor agrees to take a cash deposit of £8K instead of £18K - the sale price is still £170K regardless of the deposit. I can't see any saving whatsover, only a difference in the cash deposit amount payable at the time of exchange of contracts.

In the original post its this bit I don't see who pays who or why:

"then you would have a theoretical deposit of £10,000 already"


OK, having done a "google" I think I understand this one now. In my old fashioned way of thinking, in a house sale transaction the property value is what it sells for, in this scenario £170K. Am I correct then, that in the gifted deposit scenario, the property value is the asking price and the surveyors, lenders, solicitors all agree that that is the case i.e £180K and make their lending calculations based on that. In this case then, a 10% deposit would be required i.e £18K but the vendor requests only an £8K deposit because they have reached a sale price of £170K which is where the £10K is saved.

Now the penny has dropped. In my terms I call this negotiation of both the sale price and the deposit amount. The term "gifted deposit" is a way of making the same saving a different way by having the market value inflated above the sale price.

God, things have changed over the last 20 years....... ;D ;D

Reading SFs original post bizarre as it sounds and like he says 'theoretical' it is possible provided the mortgage provider is aware and the survey valuation is the £180k if it isn't then the value has been inflated and the possibility of mortgage fraud discovered. As Star is the solly SF I would take her free advice and drop this plan pdq mate.

As far as I know [which ain't much ;D ] the only 'acceptable' 'gifted deposit' is/ can be made from a 3rd party i.e. family member.

Many 'new' builds offer incentives and deposit help. An interesting way of buying a new house at a genuine discount is by buying one 'off plan' that is before it is even built but only use NHBC [National House Building Council] registered. Savings of 15-20 % can be achieved against the price of a completed home--you pay a reserve fee then somat around 10% but this gives time to organise a mortgage on a house that'll be ready in 12-18 months.

SF think very carefully and get paid for pro's advice before 'jumping in with both feet' and talk things/issues/points over with your proposed mortgage lender.

Good Luck with house hunting tho :)

"Am I correct then, that in the gifted deposit scenario, the property value is the asking price and the surveyors, lenders, solicitors all agree that that is the case i.e £180K and make their lending calculations based on that. In this case then, a 10% deposit would be required i.e £18K but the vendor requests only an £8K deposit because they have reached a sale price of £170K which is where the £10K is saved."

Not sure thats right, As far as im aware the deposit has nothing to do with the vendor and is dictated by the lender. So if the property is £180k and the morgage provider wants a 10% deposit then you need to pay £18k to the lender before they will release funds.

Scrap Trident, pull out of Libya, Afghanistan and Iraq. Pass the £30 Billion (approx) saved on to the local authorities across the UK to enable them to initiate an affordable house building programme. All contracts awarded on the proviso that the contractors take on apprentices. Reduces the benefit budget (2.5 million unemployed announced today) and gets some of our disaffected youngsters back in to work. And the icing on the cake – affordable housing which will help ease demand and may bring down the false over inflated private sector. Now what could be easier than that? - sorted

Sorry for hijacking your thread SF but I couldn’t resist it. Good luck with the house buying.

Yes Don-in effect the vendor has lost £10k :o in order to sell by 'gifting' this reduction. The buyer would arrange a mortgage of £162k and the seller achieves £170k.The mortgage lender,sollys, and rics surveyor must be made aware of this arrangement and that the property is valued at £180k which is what this 'deal' absolutely depends on.

Aye up the people liberation freedom fighter is in da house ;D ;D---how ya doin Ken ;)

My understanding of it is that if you know the person selling the house then you can work out a deal.
Agreed price for proprety £170k
Market value of the property £180k
Deposit required by lender @ 10% is £18k
Seller lends you a £10k that he will get back on completion
You add your £8k deposit
The sale goes through for the price of £180k
The seller gets his 10K back as he only wanted 170k for the house.
Not sure if thats correct or legal.