Gifted Deposit Mortgages - Question/Issue

jjonny85

Hi guys

At present me and my girlfriend are desperately trying to get onto the property market but like everyone else we are struggling to get a big enough deposit. Due to my bad credit a mortgage over 80% looks very unlikely.

However, my girlfriends Dad has offered to sell us one of his flats and the deposit would be minussed from his price (house is worth 100,000 - We get it for 80,000 through gifted depost). This is where I get a bit confused and worried. Does anybody know of any mortgage providers that would be happy with such arrangement? And would it work in the way I have described.

Any help or any explanations to the working of a gifted deposit mortgage would be much appreciated. Sometimes the jargon on websites I find extremely confusin!

Thanks in advance
Jonny

unite79

Most will not allow a below value purchase, ie they will value the property at the price you are paying, so you would be stuck - however a few lenders will allow blood relatives to sell properties at a reduced price, allowing you to buy with an 80% ltv product - A decent broker would be able to help.
You bad credit could be a stumbling block though!

brit1234

Sounds like a 100% mortgage to me, it will be difficult to get a lender for that. You have to declare it and if you don't you will be commiting fraud.

Better to save a deposit and enjoy the comming falls. You plan puts you in negative equity from the start,

unite79

Brit1234 - How can it put the op in negative equity - Father sells something worth 100k for 80k - Its WORTH £100k -The fact that the OP has bought it BELOW market value does not effect the fact it is valued by a QUALIFIED VALUER at £100k!

jjonny85

Do you know of any decent brokers that would be able to help? I would rather something came from word of mouth than using google to find one. So often I end up going round and round in circles and all I want is to talk to someone who can confirm or deny what im wanting to do!!

Thanks for all the responses so far! Looks like it may be back to paying someone elses mortgage then.

hostman

I dont think any lender would allow a mortgage based on 20% gifted deposit, especially if you're not putting in any money.

I know Nationwide for example allow a 5% gifted deposit (if its coming from the seller / house builder), but no more.

unite79

jjonny85 - You need to ask around for a decent broker, friends, family etc.....

Hostman - Ill give you 1, Alliance and Leicester wont have a problem!

hostman

unite79 wrote: »

jjonny85 - You need to ask around for a decent broker, friends, family etc.....

Hostman - Ill give you 1, Alliance and Leicester wont have a problem!

Well, lets clarify something:

1) A gifted deposit from a relative, i.e. actual cash they give you and you have access to in a bank account, you then use this cash to form a deposit when buying a house.

Or ...

2) You want to buy a house, have no deposit, but the house builder or seller is willing to gift you a 20% deposit. No real cash exchanges hands. The vendor isn't going to give you 20% in cash.

I'd be appalled if any mortgage lender allows option 2. !!!!!! are we going through recession for if this is accepted!?!?!?

unite79

The key point here is that the seller is the OP's girlfiends father - Dad - Blood relative!
The Dad is selling the house for below what it is valued at by the BANKS Valuer.

Umm Be Appalled - but I fail to grasp your problem - Clearly you have no Offspring - and I fail to see what relevance this has to the recession!

Bufger

brit1234 wrote: »

Sounds like a 100% mortgage to me, it will be difficult to get a lender for that. You have to declare it and if you don't you will be commiting fraud.

Better to save a deposit and enjoy the comming falls. You plan puts you in negative equity from the start,

It just flows out of you doesnt it? it just flowssssss......

unite79

Some people should offer advice on Quantive science - I know nothing about this, so maybe I should be the person to offer help - Or better still Brain surgery, after all I know nothing about that, so maybe I will have a punt on that!