Buyer doesnt have a high enough deposit

zacattack_2

cjt2512 wrote: »

It's basically two solicitors agreeing to say the house was For sale for 88 and they have received £8800 deposit when really they haven't, they receives £4400 so the lender releases the 83.5k needed but with only 5% deposit!

Any solictor who did that would be insane - no matter how you dress it up, that is fraud and their career and even their freedom would be at risk for, what, a grand in fees? Won't happen!

Uh-oh_2

When I bought my house I wrote £5k of credit card cheques on the day of completion to cover half of my deposit. This was a few years ago so I don't know if things have changed in that I never had to prove I actually had the deposit to my lender in advance.

Annisele

cjt2512 wrote: »

Thanks guys, yeah maybe swindle was the wrong word to use. It's basically two solicitors agreeing to say the house was
For sale for 88 and they have received £8800 deposit when really they haven't, they receives £4400 so the lender releases the 83.5k needed but with only 5% deposit!

Oh my. Swindle is exactly the right word for that little scheme.

You'd need two insane solicitors plus one insane surveyor (you'd have to get a surveyor to say that it was worth £88k when really it isn't). Even if you did manage to find three such dodgy professionals - would you then trust cowboys like that to do the conveyancing for you? I wouldn't!

Your friend can't afford to buy your house. If nobody else is making offers, there's a good chance your price is too high.

poppysarah

If he has 6k and needs 10% deposit then reducing your sale price to 60k achieves this.

GDB2222

What's being proposed is fraud, not something that is 'technically illegal'. It would involve lying on the mortgage application forms, etc. As G_M says, if he's a mate, dip in your pocket and give him £1500. Hopefully, one day he'll be in a position to give it back. Besides, you'll be saving estate agent's fees.

zacattack_2

cjt2512 wrote: »

Thanks guys, yeah maybe swindle was the wrong word to use. It's basically two solicitors agreeing to say the house was
For sale for 88 and they have received £8800 deposit when really they haven't, they receives £4400 so the lender releases the 83.5k needed but with only 5% deposit!

Were both in a position were we want to move ASAP so wen your saying save money, that's an option but its going to take time

I have already reduced the house I can't reduce anymore or I can't get my next mortgage.

Apparently there are a few lenders that allow the 5% legally

Chris

Why would a lender release 83.5 k on a house worth 85k (or inflated to 88k) when the buyer is supposed to have paid a 10% deposit?

Cissi

If he's a really good mate whom you trust, then the only way that I can see (except reducing the price to £60k) would be to lend him the missing £2500 (not sure why everyone keeps referring to £1500?) in cash. He pays this into his bank account well before making his mortgage application and can show that he has the necessary £8500k available. I doubt anyone would question where such a relatively small sum had come from.

However, I suspect that everyone else is right: if he only has £6k then he can't even afford to buy a house for £60k yet, so you'd potentially be helping him dig a deep financial hole for himself (and risk never seeing your £2.5k again).

The scheme that you're proposing is basically two mates conspiring to artificially inflate the sale value of your house, defrauding the bank of the difference. Apart from the fact that this is highly illegal, it isn't going to work - banks and solicitors aren't stupid. You're far from the first to have come up with this idea...

kingstreet

cjt2512 wrote: »

Apparently there are a few lenders that allow the 5% legally

Not any more there aren't. Not unless you're Taylor Wimpey. There are no lenders accepting vendor gifted deposits on second hand properties. If you try it, the solicitors and surveyor will not go along with it.

sonastin

I'm sure I've heard rumours of 95% mortgages reappearing on the market. Have done no research myself - entirely hearsay - but perhaps your mate could look for one of them if they do exist? I expect the interest rate will be much higher than for a 90% mortgage though so perhaps he still won't be able to afford it.

GDB2222

Curiously enough, I found quite a few 95% mortgages for FTBs on moneysupermarket.com This one for example:

Lender Lloyds TSB Lend a Hand
Product Name 3yr Fix (20% savings)
Type of Mortgage Fixed
Initial Rate 4.54%
APR 4.20%
Max LTV 95%
Actual Cost Over 10 Years £51,590.15
Monthly Repayments £440.90
Scheme Duration To November 2014
Lender's Base Rate 3.99%