Vendor Mortgages ... Help!?

kerrywebsta

Hi,

Me and my partner are looking into buying our first home and the one we have seen is on the market for around £135,000. We need to find a 10% deposit.

A colleague of mine has suggested talking to our bank (Halifax) about something called vendor mortgages?

The vendor has told us that they are open to offers and my colleague says if we can bring them down on the price then this will count towards our deposit.

Can anyone shed any light on this? Or suggest any helpful tips about getting the best mortgage.

Thanks

betmunch

They are refering to a Vendor Gifted Deposit Mortgage.

The idea is that if the property is marketted at (for example) £100,000

You agree to buy it for £95,000

The £5,000 difference can be considered a gift to you from the Vendor and be used as part of the desposit, hopefully lowering your Loan To Value to get a better deal.

The sale would be recorded as £100,000 on the land registry, but you would only physically hand over £95,000.

The problem with this is that you will have to declare it to the surveyor who will be asked to confirm the value of the house is £100,000 even though you are only paying £95,000. This is unlikely to happen (but it is possible) as if the property is actually worth £100,000 then why would the Vendor give you £5,000 off a reasonable price?

With regard to getting the best mortgage, go to a local broker with a good reputation and a whole of market service if you can find one. Ideally get a recommendation from someone you trust.

Cheers

_Andy_

kerrywebsta wrote: »

. We need to find a 10% deposit..)

How much money do you actually have saved up?

TrickyDicky

kerrywebsta wrote: »

Hi,

Me and my partner are looking into buying our first home and the one we have seen is on the market for around £135,000. We need to find a 10% deposit.

Thanks

Usually, the 10% is found in your bank account. If it's not there, you usually cannot purchase the property, and the best way to solve it is to save more money.

betmunch

TrickyDicky wrote: »

Usually, the 10% is found in your bank account.

Love it!!!!:rotfl:

kerrywebsta

TrickyDicky wrote: »

Usually, the 10% is found in your bank account. If it's not there, you usually cannot purchase the property, and the best way to solve it is to save more money.

HAHA. Yes I thought it may be something to do with a bank account!

We are just short of £5k so been able to get the extra 5k this way would be great.

Thanks

Yorkie1

I'm assuming that you do already have provision for the legal and search fees, removals etc as well? They will often come to a four-figure sum on top of your deposit - always worth budgeting carefully I found (moved a month ago and did the sums over and over again before signing on the dotted line!)