House deposits?

[Honda_Star]

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.

[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

[Honda_Star]

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

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.

[Ducatista]

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.

[Dabz]

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

[Roxy]

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

+1

[Ducatista]

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

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.

[Squashed_Fly]

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-)

[Snowy]

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.

[crewy]

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.