First Time Buyer? Need a Deposit for a house? Here's how to get one....

....if you need a deposit to get on the property ladder then why not think about organising a Vendor Gifted deposit. So how does this help you get a deposit? Simple. With Vendor Gifted any discount negotiated on a property could be used towards a deposit. This is obviously great news for anyone trying to get on the property ladder.

So how does it work?

Here is an example of how a deal like this would work: Let's say that you find a property advertised at £100,000. The property would value at this price but you manage to negotiate a buying price with the vendor at £85,000. Now you need to get the seller to price the property in the sale contract at £100,000 and give you £15,000 back at completion (on paper).

The net result is that you have a mortgage for £85,000 as you would always have done. The vendor receives £85,000 as they would always have done, however the bank is now satisfied that the need for a deposit has been met.

What's the catch?

There isn't one, it's completely legal and above board. When organising a Vendor Gifted deposit there are two rules which must be met. Firstly you need to find a bank that accepts this method of providing a deposit. Secondly, the surveyor must agree that the asking price is fair. This is not a way to inflate the asking price to make it look like a deposit is there.

So which Banks will lend money using a Vendor Gifted deposit?

Lenders such as the Woolwich and the Halifax will accept applications from buyers who wish to use this method of deposit.  (* correct at time of publication February 2010)

What's the next step?

Contact Graham Brooke to discuss how he can help you use this shortcut to buying a home if you don't have a deposit or with any other mortgage related matters. Tel: 01625 875352 or Mobile: 07774 744150 or Email: contact@mortgagessk12.co.uk