Mortgage Adivice (Deposits)

Oakey76uk

I have been told that there is something called a 'Vendor Gifted Deposit' for those who can't get a deposit together.
How does this work, and is it legal?

Barney088

Quite correct, there is and it is legal, however you may encounter some problems with lenders for the following reasons.

A property worth £100K on the market and the Vendor (seller) is prepared to offer you £5000 as a deposit. This would result in them only getting £95,000 from you to buy the house. A lot of Lenders would view this as you only buying it for £95,000. They would then lend you based on the £95K rather than the £100K as the deposit was not yours.

It is common for Builders to offer this as an incentive, particularly the bigger builders, barrat, wimpey etc. THis is normally OK but a few lenders have now started to not accept it. They think that the original price is inflated and then reduced this way so they are not playing the game with the builders anymore.

Hope that helps