FTB looking to use gifted deposit advice needed

cooperpaul

hello, me and my girlfriend have just started looking for our first house.

We have a combined income of 45k before tax and overtime

We currently have 11k saved up, we are currently puting 1k between us away into the savings.

we have seen my bank the halifax first, he ran us though the computer and said we could borow 200k, which we are not gonna go anywhere near.

we are looking at max 140k house. with a 10% deposit. he told us about the gifted deposit but didnt think to much about it.

then we saw an advisor at an estate agent who went though it in detail.

now i have been reading the forum for a while now and have read some good advice, from people who have been in these situations themselves. so im asking for your advise

so if im looking at a 140k house, 10% is 14k plus the fees which we think will be 2k max. so thats 16k. so we are looking to take advantage of the gifted deposit.

so if we knock a 140k house down to 135k, and the lender vaules the house a 140k we can use the 5k saved on the house to help pay the deposit.

therefore we only have to pay 9k towards the depost therefore helping us with fees things the fill out new house with

am i correct in thinking this is right and is it a good/bad idea

thanks

Wh05apk

No the lender will base the mortgage on the lower of the purchase price or the vlaue, so if you get it for £135k, you will need a £13.5k deposit @10%

whatyadoinsucka

your fees won't be anywhere near £2k, if you are FTB stamp duty will be exempt,
I only paid £820 fees buying a £145k house in Oct 2009, it wasn't the cheapest either, 3 quotes all came in between £750 and £850

Wh05apk

whatyadoinsucka wrote: »

your fees won't be anywhere near £2k, if you are FTB stamp duty will be exempt,
I only paid £820 fees buying a £145k house in Oct 2009, it wasn't the cheapest either, 3 quotes all came in between £750 and £850

You probably benefitted from a hips pack, so saved a few hundred in search fees, about £1200 would be realistic now, + potentially ~ £300 for a basic valuation.

whatyadoinsucka

Wh05apk wrote: »

You probably benefitted from a hips pack, so saved a few hundred in search fees, about £1200 would be realistic now, + potentially ~ £300 for a basic valuation.

sorry forgot hips had been scrapped, what a waste of time they were, if your house didn't sell in a month the hip needed renewing.

i only paid £150 basic valuation with hsbc, ps. remember the more you pay for a valuation the more problems they find, do your own check are the walls sturdy is the roof fully tiled/slated, are the walls damp, wood free from pinpricks (woodworm)

GMS

Halifax will allow a 5% vendor deposit meaning the purchase price would be 140k with the deposit making the discount (up to 7k)

Fee wise you are looking at around 1k sols and any valuation/booking fees for the lender.

If you can find a vendor willing to put 5% deposit in it could help you but why not try to get a 5% vendor deposit as well as your own 10%? An 85% product would be better rate wise than a 90% one.

A vendor deposit cannot be a lowering of the purchase price or the lender would work from the lower figure. Make sure Halifax adviser is aware of the vendor deposit and that the purchase price will reflect it.

ollski

We bought our house off our landlady it was valued according to the neighbouring properties at 135k, she took 100k as a quick sale to us. Cant remember what the principality called it but it wasnt called 'gifted' but was the same thing. We paid no deposit and got our mortgage at a 75% rate at something like 2.79%

GMS

Buying from your landlady is as a 'sitting tenant' so some lenders will treat in the same way as a 'Right to Buy'

This would not apply to a vendor gift

Completely different transaction

illgetthere

sorry, just to add... i was told that a gifted deposit was only available to a close member of your family ie purchasing from a father/mother/daughter/son.

i may be incorrect though, please check..

Wh05apk

GMS wrote: »

Halifax will allow a 5% vendor deposit meaning the purchase price would be 140k with the deposit making the discount (up to 7k)

In this case it is not a vendor deposit, but a reduction of sale price.

Also be careful as the lender will still base it on the lower of sale price or valuation, so even if you agree to pay £140k and get £5k "vendor deposit" if the valuation comes back at £135k, they will base lending on that figure.

GMS

Wh05apk wrote: »

In this case it is not a vendor deposit, but a reduction of sale price.

Also be careful as the lender will still base it on the lower of sale price or valuation, so even if you agree to pay £140k and get £5k "vendor deposit" if the valuation comes back at £135k, they will base lending on that figure.

If the valuation came back lower then the purchase price would reduce accordingly with the deposit to be used against that.

135k valuation would mean negotiating with the vendor for a 5% deposit of 135k.

The OP 'knocking down' the price has been put to them by Halifax as a gifted deposit. Vendor would be happy with a 5% knock down which Halifax would allow as a deposit based on the higher price subject to valuation.