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Strange house buying situation, can anyone help me?
Lady_S
Posts: 1,156 Forumite
I am posting on behalf of a friend, so be gentle with me...
My friend wants to buy a house, but doesn't have a deposit at the moment. ( still waiting on a settlement from a previous marital home which is being sold).
Anyway....
She has seen a house she likes which is on the market at 105k. It is being sold through an estate agent and they are offering to put a 10% deposit down on behalf of the purchaser.
This morning she has spoken to the estate agent and they have advised that they would loan her the 10% deposit, and then she would need to take a morgage for 117k to cover this.
Is this legal? we are both a bit confused by what they are doing and their response was '' it's fine, we will tell the morgage company the house is worth 127k!!''
My friend wants to buy a house, but doesn't have a deposit at the moment. ( still waiting on a settlement from a previous marital home which is being sold).
Anyway....
She has seen a house she likes which is on the market at 105k. It is being sold through an estate agent and they are offering to put a 10% deposit down on behalf of the purchaser.
This morning she has spoken to the estate agent and they have advised that they would loan her the 10% deposit, and then she would need to take a morgage for 117k to cover this.
Is this legal? we are both a bit confused by what they are doing and their response was '' it's fine, we will tell the morgage company the house is worth 127k!!''
0
Comments
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Sorry don't understand this. A 10% deposit is £10,500, which is being offered to you by your EA through their finance scheme I presume? This leaves your friend with £94,500 to find via a mortgage product at around £500 per month on a repayment mortgage at 4%. Why do you need a mortgage for £117k? The 10,500 is being lent to you by the EA so you'll be paying them back with interest??
So, if it were me I would stay clear of getting the EA involved. Also, it's hard when you see a place but perhaps they should stop looking until they have the deposit ready to go, therefore avoiding a potentially expensive situation in the future.
It also doesn't matter what they tell the mortgage company in terms of its value, because the mortgage company's valuation will pick this up.0 -
There's nothing necessarily wrong with the EA lending the money, but they can't lie about the purchase price - its fraudulent to do so, and anyway, the mortgage company will do their own valuation, which makes it all a bit irrelevent. Pre 2007, the lenders turned a blind eye to these things (result - we had to bail out these idiots), but not anymore.0
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Lying to the bank or building society about the selling price of a property is actually fraud so I wouldn't touch this with a bargepole!My home is usually the House Buying, Renting and Selling Forum where I can be found trying to (sometimes unsucessfully) prove that not all Estate Agents are crooks. With 20 years experience of Sales/Lettings and having bought and sold many of my own properties I've usually got something to say
Ignore......check!0 -
No doubt the offer of the 10% depsit will have strings attached - like having to use the FA in order to get a mortgage......"You were only supposed to blow the bl**dy doors off!!"0
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Tell her to save her own deposit and keep away from those who encourage fraud.
She should record her next conversation with them about it and send it to their governing body.0 -
Dodgy, dodgy, dodgy.0
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Another vote for mortgage fraud.Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️0
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