gifted deposit mortgage mess

bishbash55

Conrad wrote: »

WHAT ABOUT THE LENDERS VALUATION?

In any market the price accepted by the seller is effectively the market price (ie £117k). You are expecting a valuer to confirm its worth £122k, yet no buyer thought it was worth that or you would have achieved that price.

we accepted an offer of 117k, a valuer has confirmed with the buyer a mortgage of 122k ie he has valued the house at 122k.

all are agreed now that we can move forward with a gift deposit and a sale at 122k... well all except my solicitor who is saying they believe it is fraudulent.
orgininally my solicitor said if they got a letter confirming the lender was happy with the situation then so would they.
now the lender has agreed to provide a letter my solicitor is saying they have changed their mind and they arent happy whatever is produced by the lender.

poppy10_2

I really think your buyer will struggle to get a mortgage, gifted deposit or no. Banks have really tightened up their lending, and a below-5% gifted deposit isn't going to cut it with most of them.
Might be best to cut your losses and dump him, rather than have this sorry affair drag on only for it to fall apart a few months down the line.

bishbash55

my buyer has the mortage offer (based on a gifted deposit.) now.

its my solicitor who is pulling out.

Ian_Griffiths_Halifax

bishbash55 wrote: »

we accepted an offer of 117k, a valuer has confirmed with the buyer a mortgage of 122k ie he has valued the house at 122k.

all are agreed now that we can move forward with a gift deposit and a sale at 122k... well all except my solicitor who is saying they believe it is fraudulent.
orgininally my solicitor said if they got a letter confirming the lender was happy with the situation then so would they.
now the lender has agreed to provide a letter my solicitor is saying they have changed their mind and they arent happy whatever is produced by the lender.

This bit concerns me. What you are saying there is that he's getting a 100% mortgage at £122k and yet you say he's agreed a price of £177k with you. this would mean that he's getting £5k more off the lender than he's paying for the house. If this is the case then I can understand why your Solicitor is getting a bit concerned.

I assume that you've got this bit wrong and that he has a mortgage of £117k on a value of £122k. If that's the case then the mortgage can only be with the Halifax as the £5k difference is not 5% and they are the only ones doing 3% deposit mortgages but they do accept vendor deposits so long as the Valuer is happy to value the property at £122k.

If he's simply failed to communicate correctly in the first place and the lender is happy to proceed based on a misunderstanding, then that's not fraud, but I don't blame the Solicitor for wanting proof that the lender knows about the vendor gifted deposit.

tinkerbell321_2

bishbash55 wrote: »

yes i am a little annoyed to say the least, at him, my agents and his solicitor. there is a good chance (or is that bad) i will loose the sale.
im just wondering if this is part of his stratergy to negotiate a lower price at a late stage. either way he needs a lump sum to pay his deposit as he obviously has no equity.
its going to be tough for me to absorb what i have already spent on fees. no point getting wound up, but i could use some advice how best to proceed with my first house sale.

Listen, first of all it is COMPLETELY LEGAL ! i enquired about this through my solicitors and it is LEGAL: heres the sting in the tail...
First of all your property HAS TO HAVE ENOUGH EQUITY TO ENABLE YOU TO DO THIS; in other words, say for example your prop is worth 150,000 and you dont have a morgage.. then you can do what you like with it to sell it, so you put it on the market for 129,950 in excess of, and then someone comes along and they say i can afford your 129950, now then, you know you have 20,000 equity to play with so you can 'gift' a further 6,000 to them and they can use it as their deposit.
DONT LISTEN TO ALL THE CRAP, ITS LEGAL...as long as you have enough equity to give away which will stand up to the rics surveyor.

Cazza

Completely legal, builders used to do it a lot, they still try it just isn't working at the moment! Fewer lenders will accept it from a person (ie you) than a builder, but it is not illegal or fraud in your situation. Your solicitor has either misunderstood what's happening or is being a bit dim (in the nicest possible way). If you want to keep it all together, call your solicitor and get stroppy, you're paying their fees to get your house sold, not lose the transaction. If they won't budge, change solicitors and get you current solicitor to send the work they've done already to the new solicitor. This would slow things down, but hopefully not enough to lose the whole thing.

EdInvestor

Press release today from lenders tightening rules on incentives and disclosure

http://www.cml.org.uk/cml/media/press/1737


The solicitor may be smarter than you think.

This thread suggests solicitors have already been warned:

http://forums.moneysavingexpert.com/showthread.html?t=956789

Wutang_2

but isnt 117k on a 122k property still only 95.9%...? I can't say I have seen many mortgage companies accepting a 4.1% gifted deposit lately.

inch_high

Halifax do 5% vendor gifted no questions asked. Will do more than 5% providing the valuer confirms that the market value isnt affected.

Wutang_2

but its less than 5%