... So, is this illegal?

seven-day-weekend

I don't understand. Why should it matter who pays the deposit (other than the lender might want to see evidence of saving before granting a mortgage). Don't parents do it all the time for their kids?

opinions4u

Statsitical analysis of arrears and repossesions proves that those who fund their own deposit are most likely to pay the mortgage.

If money has come from parents, they are still pretty good payers.

If the deposit has come from a personal loan or a dubious "vendor gift" these people are, statistically, less likely to maintain mortgage payments.

That's why it matters. Lenders want to take on good risks in this day and age. Pretend deposits are not good risk.

seven-day-weekend

Oh yes, I agree that a 'pretend' deposit is dicey and that there should be actual cash on the table. I've obviously misunderstood what is happening here!

chewback

Alex, I hope you have now learnt not to ask a question because there are always some idiots on here who will just attack, attack, attack.

dollydiva

chewback wrote: »

Alex, I hope you have now learnt not to ask a question because there are always some idiots on here who will just attack, attack, attack.

Your right - if Alex wants to buy by house even though he obviously has no spare money to save any sort of deposit and by telling a few porkies to the lender he can buy it then who are we to point out the idiocy in that?

silvercar

seven-day-weekend wrote: »

I don't understand. Why should it matter who pays the deposit (other than the lender might want to see evidence of saving before granting a mortgage). Don't parents do it all the time for their kids?

It is completely understandable that parents help children out with deposits. What is not so understandable and leads to the "contrived" tag, is sellers with no connection to their buyers, other than wanting to sell their property, paying the buyers deposit. The only reason they could be doing it is to sell their property ie they are accepting less money for it.

In the current market it is possible that a seller will let a property "go cheap" in order to obtain a quick sale. This is only valid if it really is a cheap price rather than the true market price in a difficult market. The way to decide if it is a reduction on the true market value is to look at the valuation and see.

Hence some lenders will accept a vendor gifted deposit if the valuation is higher. Other lenders prefer to insist that the price an unconnected buyer pays is the market value for the property at the current time.

Alex_the_worm_king

Haha, yeah. I've been around long enough to know what kind of people can loiter on public forums and in turn what responses to expect. But, inbetween the sarcastic posts there have been some very useful posts. Obviously i'm not out to defraud anyone but I can now see the problems from the lenders point of view, so I shall not be going down that route and will continue to save like everyone else. So, cheers for your help.

opinions4u

Alex_the_worm_king wrote: »

Haha, yeah. I've been around long enough to know what kind of people can loiter on public forums and in turn what responses to expect. But, inbetween the sarcastic posts there have been some very useful posts. Obviously i'm not out to defraud anyone but I can now see the problems from the lenders point of view, so I shall not be going down that route and will continue to save like everyone else. So, cheers for your help.

How refreshing! You are a rare breed.

bronzedg

What about doing a vendor gifted ?

chewback

Dollydiva, his origanal question was "Is this illegal?" A question that just needed polite responses. If he had asked you this same question in pub would he expect everyone to be so accusing?