Maximum contribution from builder

avi_3

Hi - Looking to buy a house and going to negotiate with builder about contributing towards the deposit.
Are there any regulations or limits i.e maximum % that the builder can contribute or can they do how much ever they wish e.g 10% or even 20%

arkie

If this is a new build lenders are being very cautious as they feel the property is being over valued, i think the best is about 5% although some lenders will allow more if you match what the builder is putting in.

bubblesmoney

if a seller gives a gifted deposit of 20% of sale value. then actual market value is 20% less. it is just fudging the paper values to get a deposit that doesnt exist in actual terms. it is precisely this type of mortgage fraud that has landed the financial systems in shitscreek in a canoe without a paddle and why even people who saved and didnt spend irresponsibly are in trouble as well as even they face higher interest on mortgages now because of irresponsible borrowing behavior by others :mad: (banks/mortgageadvisors/home buyers who didnt have deposits - all of which encouraged vendor gifted deposits - which is just a glorified name for mortgage fraud which over values a property on paper so that someone can get a 'gifted' deposit)

Tiddler_2

And how many deals that you know of have 20% gifted deposits on them?

It's fraud if the mortgage company doesn't know about these incentives/discounts - if they do and the property is assessed by their (the mortgage company's) valuer then how is that a fraud?

For a fraud to have taken place there has to have been a deception.

The financial meltdown has nothing to do with 5% builder funded/vendor gifted deposits. It's due to banks/mortgage lenders taking stupid risks, in search of short term profits and the people agreeing these policies getting big bonuses.

Similar things are happening in the City every day with short-selling, through greedy speculators gambling with other peoples assets in a bid to buy their next ferrari/porsche etc. We have turned into a greedy/selfish dog eat dog nation

If the banks had not priced the Self Cert, NINJa mortgages so close to normal prime rates then the ability to get mortgages you couldn't afford would have not happened, and the house price boom of the last few years would have been a lot slower and more managable.

bubblesmoney

Tiddler wrote: »

And how many deals that you know of have 20% gifted deposits on them?

It's fraud if the mortgage company doesn't know about these incentives/discounts - if they do and the property is assessed by their (the mortgage company's) valuer then how is that a fraud?

For a fraud to have taken place there has to have been a deception.

The financial meltdown has nothing to do with 5% builder funded/vendor gifted deposits. It's due to banks/mortgage lenders taking stupid risks, in search of short term profits and the people agreeing these policies getting big bonuses.

Similar things are happening in the City every day with short-selling, through greedy speculators gambling with other peoples assets in a bid to buy their next ferrari/porsche etc. We have turned into a greedy/selfish dog eat dog nation

If the banks had not priced the Self Cert, NINJa mortgages so close to normal prime rates then the ability to get mortgages you couldn't afford would have not happened, and the house price boom of the last few years would have been a lot slower and more managable.

it is not fraud if the lender knowingly lent the loan after knowing the finances of the person. but if there were undeclared cashbacks then that would be fraud. it isnt that uncommon to see cashbacks advertised. i really wonder if all such cash backs are declared to lenders, especially the ones being privately sold on rightmove etc.

but if the banks / mortage advisors deliberately turned a blind eye when they knew it was fraud then they need to face the music too and they need the book thrown at them. why make rules if they are not meant to be followed. if everyone started following the law selectively to suit their own moralities and justified diversions from the legal route then condoning such things wouldnt be good for the law abiding people. people who decide applications need to follow the rules set down, if they deviate and apply rules selectively based on their own prejudices or misplaced socialism then they need to have the book thrown at them. just because some people in power (peter mandelson) escape the law doesnt mean that every tom !!!!!! and harry have a right to choose which law they will abide by and which they wont abide by. just see the 'lie to buy' mortgage thread and it is obvious some mortgage advisors (like conrad et al on this board on the 'lie to buy' thread) still condone lie to buy mortgages with misplaced socialist ideas.

loans after all are other peoples money being lent on terms acceptable to the lender, based on the risks they deem acceptable to the lender. if some subprime borrowers want to lie to buy and get lower interest rates, then by lying about their income or about how the deposit was got is deception to get the lender to believe they are lending to a less risky client. it is immaterial whether the borrower / mortgage advisor says their mortgage payments are lower than their rent and that they can keep up the payments to justify the fraud. lenders are entitled to charge interest rates based on risk involved as per their assessments. if borrowers try to decieve them as to the level of risk then that is fraud and the mortgage advisors who knowingly process such fraudulent applications are abbetting fraud. there seems to be no dearth of such people abbetting the fraud and they should carry the can when such things are discovered.