New build with gifted deposit.

haisharif

Hi All,

My mortage application got rejected from Nationwide for 85% LTV for a new build house. The list price was 240 K but managed to negotiate at 210 K. I have 15 % as my saving but Nationwide said it need 20 % min deposit to proceed. Now my mortgage advisor (one thru builder as that was one of the condition for sale) says that we can restructure the price so that the sale price will be 221 K with 5 % gifted deposit and I have to put 15% which will make 20 % and we can reapply to Nationwide. The only problem will be if Nationwide valuation turns out to be less than 221 K and I will loose 380 Pounds for valuation. Also this mortgage advisor is charging 150 Pounds for his service. I have already paid 1000 Pound as reservation fee and I m afraid of loosing it if sale doesnt proceed. On top of this I dont want to loose 500 Pounds for valuation and advisor fee if I know its not going to help me. I know many lenders will not consider gifted deposit so I m limiting many lenders as well. I am not sure how to get the exact value of the house without going to the lender and paying the fee. Any suggestion please ????

Also anyone had any case where builder giving the cash (5 %) gifted deposit in hand and then buyer showing it as actual deposit. By doing this I wont be limiting to fewer lenders.

Any help would be really appreciated.

Bunny_Mad

Hello.

Im sorry to say it, but if I were you I wouldnt bank on the valuation been anywhere near the price you have agreed to pay, or the £221k. The valuations that Mortgage companys conduct are not based on Market value at the moment. My Mortgage company told me its too volatile for other sales to be used as a comparison.
My house was recently valued by 7 estate agents & the Mortgage company, in the same week. The Valuer for the mortgage came in well beneath the average figure of the estate agents, over 20% lower!
So if you really dont want to risk losing the £380 valuation, think again.

The other thing to keep in mind (as I found out) some lenders are not keen to loan money on newly built or renovated properties, unless they are over 2 years old, as they think that their market prices are inflated. You may want to check that this wasnt an additional issue for them, before you pay out anything else.

I hope the broker got you a good deal for his £150.

Can he draw something up agreeing that if the valuation is under the required £221k, & you cant get the mortgage, the valuation & his charges are refunded to you from the £1k Deposit you made. As he is giving you the advice, see if he will put his money where his mouth is.

Im sorry I can advise you on the 'gifted deposit' that isnt something I am famialer with.

But I hope the other points may have helped you in some way?
Good Luck.

unite79

Amending/Increasing a price to include a Builders Deposit - Not telling Nationwide - Not declaring on Forms to Lender/Land Registry - Ask the broker to put his idea in writing - and promply send to the FSA - Mark the envelope - PROBABLE MORTGAGE FRAUD!

dunstonh

unite79 wrote: »

Amending/Increasing a price to include a Builders Deposit - Not telling Nationwide - Not declaring on Forms to Lender/Land Registry - Ask the broker to put his idea in writing - and promply send to the FSA - Mark the envelope - PROBABLE MORTGAGE FRAUD!

It isnt probable fraud. It is fraud. That is exactly what some of these recent prosecutions have been about.

Lenders turned a blind eye to it during the growth years as it would only be a short time before house price rises would put you back with surplus equity. However, in a falling market, it isnt prudent to start you off in a negative equity position.

My house was recently valued by 7 estate agents & the Mortgage company, in the same week. The Valuer for the mortgage came in well beneath the average figure of the estate agents, over 20% lower!

That sounds about right. Estate agents are generally considered to be over pricing houses by about 20%.

unite79

Dunstonh - Probable, due to the fact I or indeed you cant prove 100% that the Broker has not got an Exclusive arrangement with Nationwide - We can however be 99.99999999999999999999 Recurring that they have not!

FraudBuster

From the FSA:

The current stress scenario models a recession more severe and more prolonged than those which the UK suffered in the 1980s and 1990s and therefore more severe than any other since the Second World War. It assumes a peak-to-trough fall in GDP of over 6%, with growth not returning until 2011 and only returning to trend growth rate in 2012. It models the impact of unemployment rising to just over 12% and, crucially, the impact of a 50% peak-to-trough fall in house prices and a 60% peak-to-trough fall in commercial property prices.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/068.shtml

haisharif

Thanks all the experts!
Do any of you know any bank which accepts gifted deposit towards actual deposit.
Also any bank which has free first time buyer incentives like free valuation and so on.

Regards

kaa_3

You have mentioned a Nationwide. Had an appointment last week to see what products are currently available for FTB and they have told me that gifted deposit scheme is accepted by them, depends on the LTV % . Phone and ask them.