Mortgage with no deposit?

Kitson

Hi,

I met a man who had made a lot of money from property developing who said that it was possible to get a mortgage with no deposit, e.g.

if a house is worth 100,000 and the mortgage is say 85% (he did this about 5 years ago so they were available) then you only pay 85,000 for the house you pay no deposit.

My question was is this legal? and, if it is does the seller have to say they sold it to you for 100,000 and give you 15,000? or how would it work?

Hope someone can help me with this, really hope it is possible :P
Thanks in advance,
Kitson

beecher2

It isn't possible as the lender would calculate LTV using the £85,000 figure, not the £100,000.

m_13

I've just seen your other post asking about BTL mortgages for 20/21 year olds.

Whilst I admire you for wanting to start your property empire, no it's not legal to ask somebody to declare one thing and then pay you money back.

Have you seen a property you are interested in buying? Where will you live? Have you worked out whether the rent would give you a profit after you've paid the mortgage and other expenses (gas certificate, insurances etc). At 20/21 do you really want to become a landlord or landlady?

Kitson

Haha, I'm not trying to deceive anyone the concept just really intrigued me.

I have done some research e.g. student housing can generate around £1200 per month on houses which would struggle to get £800 when not let to students only because of the way the pricing is broken down to them/me.

I'm just trying to see if it is even vaguely possible for a young person to start making money in property.

Kitson

flecker

Kitson wrote: »

Haha, I'm not trying to deceive anyone the concept just really intrigued me.

I have done some research e.g. student housing can generate around £1200 per month on houses which would struggle to get £800 when not let to students only because of the way the pricing is broken down to them/me.

I'm just trying to see if it is even vaguely possible for a young person to start making money in property.

Kitson

Be careful with BTL in university towns (with apologies for linking to the Express..): http://www.express.co.uk/posts/view/241363/University-ghost-towns-fear-as-tuition-fees-riseUniversity-ghost-towns-fear-as-tuition-fees-rise#ixzz1Jrn10MP3

Personally, I'd also do plenty of research into bubbles, historical house price to earnings ratios, historical interest rates and the like (Property has been an insanely quick money maker for some in the recent past - especially 2000-2007 - but that doesn't mean it will do the same in the near future. In fact it makes it rather likely that it won't, IMO...)

edinburgher

I'm just trying to see if it is even vaguely possible for a young person to start making money in property.

I'd focus on a real career as opposed to a life of BTL opportunism - it won't make you popular (or rich, unless you're willing to do a lot of research and have lots of capital to begin with). The era of BTL muppets who built up 20+ property portfolios on the strength of their word is thankfully going the way of the dinosaur.

Kitson

Oh I'm concentrating on a career (still at uni) was just interested.
Kitson

kingstreet

You could use part of the price reduction as a vendor gifted deposit, but then that would be limited to 5% maximum and there's only one lender who would accept it, Halifax. You'd then need cash on top of that because Halifax, along with most other lenders, has no 95% mortgage facilities.