5% deposit paid

younghavenlad

Hello all,

I am aware that generally the 'deposit paid' schemes are an attempt to over-inflate the house price then offer a discount to try and 'fool' the mortgage lender into a higher LTV.

Having discussed it with my mortgage lender they have confirmed that we will need to come up with a 10% deposit on the adjusted value (house price minus the 5% gifted) which is absolutely fine.

What I want to know is when the 5% deposit paid by the developer kicks in.

The house will not be finished until Dec/Jan however the developer is looking to exchange contracts at the end of August at which point I understand the solicitor will want a 10% deposit.

We will have the 10% deposit on the 'adjusted' house price by December/January but we will not have it at the end of August.

Will the 5% deposit paid be taken into consideration during the exchange of contracts (whereby we will top this up with our own 5%) or would we be expected to provide the full 10% in August and their 'gifted' 5% would come off at a later stage?

I hope I've explained it clearly enough...!

Thrugelmir

younghavenlad wrote: »

I am aware that generally the 'deposit paid' schemes are an attempt to over-inflate the house price then offer a discount to try and 'fool' the mortgage lender into a higher LTV.

Actually its to hide the true sales value when the selling price is recorded on Land Registry.

Enables the developer to hide any heavily discounted sales.