Gifted Deposits

MortgageChallenge2011

Hi all,

Time to start my mission to get out of rented and into our first home. (Mad I know but fed up of the uncertainty of tenancies and moving)

Money saved - £7k. Need £12.5K for 10% deposit

Starting my challenge now to keep an eye on the market.

To start off can someone please tell me if 5% deposit gifted mortgages are still knocking about from reading other posts on this forum some time ago. I could go for a 90% LTV now if I put 5% down and the seller 5% to get a sale.

From another site I read that (this was couple of years ago though) that certain companies were more chilled out to this approach but you did pay a little extra in interest rates - they mentioned Kensington, GE Money, Mortgage Express.

I had some time spare so I called GE Money up this afternoon and they said they go through brokers but are only lending at the moment to very high risk cases ie Bankrupts. He mentioned 12% and laughed "in a nice way don't come to us unless you really have to"

Any thoughts greatfully received.

FantomX

Hi...go see a broker when you have the 10% or preferably more! You seem to looking at the alternative lenders? Have you had some past issues with credit?

MortgageChallenge2011

Hi, thanks for the advice. I've had a small credit problem some 5 years back but nothing since then. I found an article listing them companies as less strict than the high st banks and more likely to go for a gifted deposit.

FantomX

I'm not a broker or adviser, but they are a few guys n gals on here who can advise you better. Your credit history records are usually for 6 years so if you have any bad strikes against you then it would be better to wait until they have "dropped off" the reference agency records.

As for gifted deposits, I'd forget that crap as that does not show your saving or money management potential so as far as I know lenders tend not to offer preferential Interest Rates for something you didn't save up for!

You'd be better off saving as much as you can, waiting until any bad credit strikes have gone pass 6 years and then approach a whole of market broker in order to try and get you the best rates!

If you rush this and then go for a sub prime lender, you'll be paying a lot more and it may end in tears! So take your time, save and then shop around with the MAJOR players and not the sub prime stuff!

However, one of the broker/adviser guys will give you a bit more detailed advice!

hcb42

very few properties on the market where the seller offers a deposit.....so i dont think this is viable, you will just have to wait a little longer and save that crucial percentage

MortgageChallenge2011

Well its my challenge for this year and I'll keep putting the pennies away, at least house prices might be cheaper by the time there is a big enough deposit!!

GMS

Vendor gifted deposits are not something all lenders will allow. If you needed to use a vendor deposit then you would be restricted as to the lenders available.

Poor credit may mean this is not an option anyway due to credit scoring.

The lenders you mention either no longer lend or do not do 90% mortgages anymore so be careful of the information you get from the internet.

GE saying what they said is quite frankly bizarre.

Speak to a 'Whole of Market' broker to see if there is a way forward, and keep saving as much as you can.

antrobus

MortgageChallenge2011 wrote: »

From another site I read that (this was couple of years ago though) that certain companies were more chilled out to this approach but you did pay a little extra in interest rates - they mentioned Kensington, GE Money, Mortgage Express.

Mortgage Express was a Bradford and Bingley operation, now owned by the government - I don't think it's accepting any new business.

Both Kensington and GE Money are sub-prime lenders who deal only through brokers and, as you have discovered, the 'little extra' is an understatement.