Vendor Gifted Deposits

JayBird2010

Hi All,

am very new to mortgages and went to see a mortgage broker yesterday.

I am looking at buying a house at around 83,000 and have about 8% of that in saving at present.

The mortgage advisor suggested that we maybe interested in going via the Halifax and going for a Vendor Gifted Deposit.

After he went through it all it sounds fairly appealing.

However, i am still left a little bit bewildered on how it is done.

is anyone able to explain it in "idiot" term to me please

The gist that i have is that:

* Myself and the Vendor (Person who is owns the house and is selling it) go 5% each

* I get a mortgage for 83.000 (bank / solicitor made aware of 5% vendor)

holly_hobby

Vendor gifted deposits cause problems with lenders - as if the purchaser is not putting any of their own funds into the pch of the property - it in effect becomes as 100% mge. (I know this is not quite the case in your situation, but you get the idea why some lenders would rather steer clear).

This means (in the lenders eyes) that the purchaser may not attempt to maintain their mge in times of trouble as they effectively won't lose any of their own capital on the sale. (I'm not referring here to shortfalls on repossesed sale and the fallout from that)

There are a few lenders though that are happy to lend when there is builders depost, gifted deposit, vendor deposit or discounted pch price/family sale. And your adviser has told you Halifax are happy to accomodate vendor deposits - which is great news for you .

Everything else in connection with the processing of the mge and the purchase runs as normal - so you've really nothing to be concerned about in respect of the gifted deposit ... just to say lucky you !!

Hope this helps .. but if you want anything clearing up or explaining, ask your broker he should be only too happy to go through the nuts and bolts until you're clear on whats happening ...

Holly