Cash back from developer?

northernval

When buying a new house – if I have cash back from the developer under 5% of the purchase price – does the mortgage lender have to be informed? – What price is registered on the land registry? - Does this change if the amount of cash back (for deposit or ‘mortgage paid for 12 months’ ‘10k cash back’) if the total is more than 5% of the purchase price? Is there another way to avoid informing the lender legally – such as a separate contact for the cash back?

UK007BullDog

You want your cake and eat it. The builder will be asked how much incentive you got. The lenders are very sharp on this now and try to cover their backs as they were hit with mortgage fraud on the new builds.

dunstonh

So, the builder has increased the property price by 5% to give you back 5%.

What irritates me a bit with posts like this is that these are the types that come back a few years later complaining that they were lied to or mis-sold or their solicitor and builder committed fraud.

Its fine when they want the mortgage but when it goes wrong, they will be looking for someone to blame. Unfortunately, the claims culture of the UK means that they will probably find someone to blame and claim off.

chappers

I thought most lenders were ok with 5% or less incentives.

Take a look here part 2 section 6.3.2

http://www.cml.org.uk/handbook/frontpage.aspx

but as Dunstonh says are you sure you are getting the property at the right price.