Re: Are you allowed to borrow your mortgage deposit?

In article ,
snipped-for-privacy@btopenworld.com writes



>> > We had a buyer who offered £189,000 for our house - the asking price
>> > was £180,000, but he was including his 5% mortgage deposit of £9000. >> >
>> > Is that legal, please?
>>
>> He sounds like the financial director for Enron. You cant count the same
>> money twice. If he has offered you £189,000 that is what he pays you, how he
>> operates (or misunderstands) his mortgage, is his problem.
>>
>~
>Thanks.
>
> No, he wanted to pay me £180,000 and keep the £9000 for his
>deposit - sounded dodgy to me, too, but I wondered if it was also >illegal?
I would have said so. There is an element of deception.
The mortgage company will only lend up to the valuation.
Reply to
Mr X
"Mr X" wrote
It sounds like the buyer is after what some people call a "gifted deposit". In other words, the buyer wants the price to be 189K, but wants the seller to pay 9K of it! [As a "gift" to the buyer, so he can then "pay" 189K using only 180K of his own money - but note that the money doesn't normally get transferred to the buyer first, it just stays with the solicitors.]
Apparently, some mortgage companies will allow this - but only within certain limits, and still subject to the valuation being high enough, and only if they are also told that it is happening...
"Mr X" wrote
True - but the buyer will be hoping that they value it higher than 180K! [And/or they are allowing a 100%(+) mortgage...]
Reply to
Tim

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