... So, is this illegal?

[Deleted User]

antrobus wrote: »

Quite. The deposit goes to the vendor, and it is a deposit on the house.

As to the original question; no, it isn't bleeping legal. (Which is not to say that this sort of thing hasn't been tried before.)

Perhapse I worded that incorrectly. If you don't have a deposit you will not get a mortgage (unless they bring back 100% mortgages).

You have to PROVE you have a deposit to the bank to get a mortgage, and they won't accept that you've "paid it already".

Thus, you have to have the deposit to GET the mortgage - and sometimes you need to prove where it came from, if it doesn't exist you can't do this

mostlycheerful

“Accusing”? “Attacking”? What are you on about? The question was is it illegal and in the absence of any sensible explanation that it’s not illegal the OP is correct to highlight that it’s possibly/probably fraud, which is what everyone has made the effort to discuss and explore. So no accusations or attacks whatsoever, just reasoned analysis as to what this might be and what sensible courses of action might be taken - and whether possibly it might be legal but agreeing with the OP that maybe on the face of it it’s probably not. Doh, get a grip people.

FraudBuster

Individual purchasers can commit mortgage fraud by obtaining a higher mortgage than they are entitled to by providing untrue or misleading information or failing to disclose required information. This may include providing incorrect information about:

• identity
• income
• employment
• other debt obligations
• the sources of funds other than the mortgage for the purchase
• the value of the property
• the price to be paid and whether any payments have been, or will be made, directly between the seller and the purchaser

http://www.lawsociety.org.uk/productsandservices/practicenotes/mortgagefraud/2607.article

achitophel

dollydiva wrote: »

I suggest you explain this all to your chosen solicitor...see how that goes down...:rotfl:

I'd be very surprised if they'd look favourably on this. As Dunstoh has already pointed out, there are lots of prosecutions pending for various professionals involved in inflating the prices of property. There may be a paper valuation of £120k, but banks like to know that they are lending against an actual transaction.

What you are describing is incorrect - it's not a £10k gift from your friend - the "gift" is entirely conditional on your buying his house; legally, that makes it a discount - i.e. the house is being sold for the net price, regardless of whether you move the £10k cash around or not.