Do Not Do A Vendor Gifted Deposit With Rbs

scottburke

Just a bit of advice to other home buyers. me and my wife are FTB and have banked with RBS for years. we ve been saving in a RBS First Home Starter account with RBS for 2 years (crap interest rate but get 1k towards mort if 10k in for 6months). found out 2 weeks after getting an AIP that we wouldnt be able to get a mortgage with the RBS as they had withdrawn all 95% LTV mortgages. was not very happy about this at all!! but after speaking to an estate agent about a house they told us the vendor was keen to sell and would be prepared to lower price on house. and do us a vendor gifted deposit for 5% of value of property. with our 5% this would make 10% we needed to get a mortgage. after a call to RBS to ask if they would accept a VGD for the 5%, which they said yes to, we proceded with mortgage. the house is 6 bed double garage detatched and was originally up for 300k (aug08). lowered down to 249k (nov08). but where prepared to lower down to sale price 240k and do us a VGD for 12k. meaning we paid 12k and our mortgage would be for 216k = they recieve 228k for house.
after signing all papers for the mortgage. and paying our £275.00 for the valuation fee to the RBS mortgage advisor. he told us the only problem that there maybe would be the valuation, but looking at the property he said the house was obviously worth the 240k so not to worry.

3 days later we get a big shock and find out that the RBS surveyor has valued the property at 228k. which they said they would only loan us 90% of that amount against that house!! :mad: not happy at all. the said surveyor had valued it at that price as only other 6 bed in street that had been sold in last 3 months had gone for 220k. i told them that i knew which house he was talking about but that was a reposession and had been bought at auction for 220k and was smaller property on smaller plot!!

funny how they valued it at exactly what we were paying for it!!. so just wiping out the vendor gifted deposit!!! if they d of just said to start with that they not happy to deal with vendor gifted deposits, as 3 other banks i phoned for rates did, it would of saved me a lot of money and time - valution fees and solicitors search fees!!!

heard from a couple of other people that this is becoming standard. banks, or the RBS, are down valuing properties when a buyer is using a VGD.

sorry long story but thought others needed to be made aware. be careful.....

mace1106

I know this thread is a month old or so but just to point out.

RBS aren't in control of the valuation, it's done independently by Chartered Surveyors who would realistically of valued the property at what it's worth. Chances are they've done you a favour, as opposed to you paying above what the house is actually worth. You should of either discussed it with the valuer and tried to get them to increase it back to the original price you needed. Or negotiated the sale again down to £228,000 with a VGD.

It wasn't RBS that messed this up for you. And the valuer only did what he was employed to...in your interests and the lenders