Gifted deposits - First Time Buyer

maxiner

Hi, I have been lucky enough to inherit some money and would like to buy a house now the market is down. I have a 10% deposit but know mortgage lenders (and to get the better rates) they are considering 15% and above.

Does anyone have any comments/experience on gifted deposits? Im not entirely sure how they work but think you ask the vendor to put up the other 5% or so.

Or, is it best to wait and see if the lenders will change their options for first time buyers and carry on saving?

Feel really frustrated that I am 30 years old and still not on the property ladder. Think there must be lots of people out there who just cannot save these amounts of money.

suisidevw

A fair few banks are offering 90% LTV's now however the rates are obviously higher. Have a look

maxiner

Will do thanks, havent spoke to a mortgage advisor for a few weeks so good to see things are changing..

suisidevw

These deals have been open for a while. Natwest and HSBC to name 2. Obviously your income has a large effect as well....

trumpton

A gifted deposit is when someone gives you money towards the deposit, signing a form which confirms that they have no claim or interest in the property and that it is a gift, not a loan. Usually this is money comes from a family member, but 'gifted deposits' were also used on new build flats as a way of getting around the LTV mortgage problem. However, I think lenders frown on such arrangements now and I think it is unlikely that a private vender will be interested in such an arrangement.

I would keep saving and keep watching for good deals. Although 20% deposit is hard to save, it does at least protect you from further price falls. If you bought with 95% LTV, it's not unlikely that there would be 5% price falls over the next year or so (depending on area) - you are then in negative equity.