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Is "cashback" legal???
Options
alainax
Posts: 27 Forumite
My EA said that if we cant sell the property he could put it on as £55k with £2k cash back.
He says this works by the buyer getting 55k from the mortgage company, but only paying us 53K, allowing them to keep the 2K left over.
I thought it sounded like a great idea till i thought, wouldnt the bank be unhappy with that! or do you not tell them? But dont they have a legal right to know? Im so confused!!
If it is legal id love to do the same with the property we are looking at buying as some spare cash would be great.
If anyone knows anything abut this - id really appreciate some advice!
Thanks.
He says this works by the buyer getting 55k from the mortgage company, but only paying us 53K, allowing them to keep the 2K left over.
I thought it sounded like a great idea till i thought, wouldnt the bank be unhappy with that! or do you not tell them? But dont they have a legal right to know? Im so confused!!
If it is legal id love to do the same with the property we are looking at buying as some spare cash would be great.
If anyone knows anything abut this - id really appreciate some advice!
Thanks.
0
Comments
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Yes, that is fraud.This is not financial nor legal nor property advice. Consult a paid professional if in doubt.0
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specifically mortgage fraud. You could argue its a "vendor gifted deposit" but it would need to be disclosed and agreed by the lender.0
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Yeah that makes complete sense! I knew it sounded too good to be true! I wonder how they are getting away with it with other properties!0
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As long as its fully disclosed to all parties then a gifted deposit is do able although its difficult to find a lender who would accept this.
I had a buyer not too long ago that wanted to do this.
My solicitors advised it was legal but is rare.
I agreed and the paperwork was supplied by the ea to show it fully.
The house sale fell thro which was instigated by the buyer.
They sacked their financial advisor and went with a bank instead which meant all the paperwork had to be changed again.
My advice is to stay clear of this option.0 -
It is NOT fraud unless there is an element of deceit to gain a benefit - eg not telling the lender. It is however, just plain pointlessHi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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DVardysShadow wrote: »It is NOT fraud unless there is an element of deceit to gain a benefit - eg not telling the lender. It is however, just plain pointless
correct- it should be either spelt out in the offer or agreed in correspondence with the lender.
You will need to pay Land registry fees and Stamp duty at the higher price however (not relevant in this case).0
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