Gifted Deposits Again

[Michael]

Girl at work and her boyfriend are buying a house for £180k with no deposit...They can do this by agreeing with the seller's solicitor an official sale price of £200k meaning the ''90%'' mortgage is a de facto 100% mortgage......

As long as the bank's or BS's valuer accepts the £200k valuation they've got round the problem of needing a deposit...

and the higher price appears in the house price stats.........showing the sale price at 11% higher than the real price....so such deals would prevent falls being shown in the Haliwide figures.........In a difficult market you could disguise even larger drops in this way.

In a market where property is hard to sell expect a lot of this..

IS IT A LIAR LOAN, ERIC ???

Edited April 12, 2008 by Michael

[Frank Hovis]

As long as the bank's or BS's valuer accepts the £200k valuation

And there the plan falls apart.

I know two people who are struggling to get a new mortgage deal when their old one runs out. In one case I'm not really surprised to be honest, but the other is a perfectly good risk.

As there are lots of these type of people queueing up for mortgages lenders no longer need to accept anything that looks remotely dodgy.

[Salopian]

The buyers conveyancer is required to report such arrangments to the buyers lendor for

approval. It is unlikely a lendor will agree such a scheme although some lendors have

in the past allowed small allowances under say 5%.

Lendors are not fools and are well aware of such possible arrangments and while the

point you make regarding the Land Registry/house price stats price shown is valid it must always be realised

they can often not be the full story for many legitimate reasons.

JB

Edited April 12, 2008 by Salopian