Buying a house, deposit question.

The Halk · 18 Apr 2012 at 21:52

Because you're lying to the bank about what it's worth. If it was worth 125K then the seller wouldn't be paying you 12K.

Edit : I just checked what Lloyd's scheme was - it's got nothing to do with that, not similar.

shep_no_platinum · 18 Apr 2012 at 21:54

No, it's worth £120,000 to £130,000. It's just been valued by Halifax as he's just got divorced, remortgaged the house and bought his x wife out. He has money spare but just wants to get rid of the house and move on from that part of his life. So basically I'm getting it for £113,000 even though it's worth £125,000 as he's givin me the £12k for my deposit.

It's not a case of its worth £113,000 but I'm pretending it's worth £125k so the seller gets more... That is fraud!

The Halk · 18 Apr 2012 at 21:56

If you're getting it for 113K then that's the value the bank will consider for the mortgage. It's mortgage fraud if you tell them any different. That is the long and the short of it.

It may have been valued at 120K to 130K, but that's only if someone is around prepared to pay that. They clearly aren't since he's offering you cash under the table.

robgmun · 18 Apr 2012 at 21:59

The Halk said:
It's a very common thing, it's called mortgage fraud. The banks I work for is on to it, and we've taken steps to eliminate it this year, I'd imagine other lenders are doing the same.

The problem for us is you buy a house for "200" except it's not worth 200, it's worth 180, and you lie to us and say it's worth 200 and you're paying 200, except you only pay 180.

Not only were you unable to save up the 20 deposit - which means you don't have a proven track record at being sensible with the money. But if we ever do repossess, we're going to lose that 20 off the potential value of the property.

Cry me a river....

shep_no_platinum · 18 Apr 2012 at 21:59

Lol just no winning with some people. Think what you want pal but as far as I'm concerned it's worth what he wants and he's kind enough to give me £12k for my deposit. Nothing fraudulent about it.

The Halk · 18 Apr 2012 at 22:01

Think what I want? I'm not expressing an opinion, I'm expressing a fact. What you and the vendor are considering is fraud.

Do you want to go to jail?

[TW]Fox · 18 Apr 2012 at 22:03

shep_no_platinum said:
Lol just no winning with some people. Think what you want pal but as far as I'm concerned it's worth what he wants and he's kind enough to give me £12k for my deposit. Nothing fraudulent about it.

I don't think you understand what you are doing - you've been given very sound advice in this thread.

You are not purchasing this house with your money you are purchasing it with the banks money so it is what THEY think its worth that matters not what YOU think its worth.

radderfire · 18 Apr 2012 at 22:09

shep_no_platinum said:
Lol just no winning with some people. Think what you want pal but as far as I'm concerned it's worth what he wants and he's kind enough to give me £12k for my deposit. Nothing fraudulent about it.

Whilst I don't have time to look into it fully, I'm sure it would be classed as mortgage fraud.

Saving for a deposit is good financial discipline, and getting into that discipline will be helpful when you own the house, as things tend to get expensive (I don't own a house though yet). In my view it's a bad idea to take artificial help, only buy the house when you can do it under your own steam.

Rgds

shep_no_platinum · 18 Apr 2012 at 22:11

Exactly and the bank valued it at £120-£130k...

Lol jail? I'm getting £12k off someone and then using it as a deposit. That's normal, just like my parents or anyone else giving me the money.

I'm then buying a house for the asking price... Not anymore, not £12,000 more than what it's worth (which is fraud). Sigh

Just close the thread.

The Halk · 18 Apr 2012 at 22:15

shep_no_platinum said:
Lol jail? I'm getting £12k off someone and then using it as a deposit. That's normal, just like my parents or anyone else giving me the money. .

If the 12K is dependent on the sale of the property then it is not the same as your parents giving you the money. It is a reduction in the asking price.

I've tried very hard to explain this to you as clearly as I can. I work for a high street bank, I know exactly what I'm talking about. Not only have I gone out of my way to try to help you, but you're throwing the advice back in my face because you don't like it.

shep_no_platinum · 18 Apr 2012 at 22:17

I just disagree. I was an estate agent for 5 years. Anyway, enough said on the matter...

/thread

The Halk · 18 Apr 2012 at 22:20

So if you knew the answer all along, why did you create the thread?

radderfire · 18 Apr 2012 at 22:21

The Halk said:
If the 12K is dependent on the sale of the property then it is not the same as your parents giving you the money. It is a reduction in the asking price.

I've tried very hard to explain this to you as clearly as I can. I work for a high street bank, I know exactly what I'm talking about. Not only have I gone out of my way to try to help you, but you're throwing the advice back in my face because you don't like it.

Just to say that I agree with you and I think you've given some good advice.

Rgds

[TW]Fox · 18 Apr 2012 at 22:21

The Halk said:
So if you knew the answer all along, why did you create the thread?

Quite. How bizarre. Seems suddenly he's turned into an expert once he realised he didnt like what everyone was saying :confused:

[FnG]magnolia · 18 Apr 2012 at 22:23

I think the point is that he didn't know the answer which is worrying in itself. I remember his posts from his estate agent days.

OP, you've been given great advice in here so ignoring it probably isn't your best option.

HangTime · 19 Apr 2012 at 01:47

shep_no_platinum said:
I'm then buying a house for the asking price... Not anymore, not £12,000 more than what it's worth

It is entirely possible for an asking price to be £12,000 more than 'what it is worth'; in fact as I'm sure your career background will have shown you many house sales take place at less than the asking price. I wouldn't say that necesarily makes it fraud though, but then I'm no expert on the subject.

I think it sounds like something you'd need to tread carefully with but no doubt some people have got away with it. A friend of mind who bought the flat he was renting had his last years rent refunded (probably a tax dodge by the landlord) to use as a deposit.

Threepwood · 19 Apr 2012 at 01:57

Why dont you take his offered deposit.

Go to a bank.

Ask if you can get a morgage for the full ammount with the deposit you have.

And see?

I don't see the problem? Edit: ie. Is there a law about somebody giving someone a deposit? And is there a law against paying the asking price on a house?

The Halk · 19 Apr 2012 at 02:10

People were getting away with it, that's why lenders have cracked down on it.

Shadesofgrey - He doesn't have a deposit. He'd only get that money if he bought the house. It's cashback/a discount/whatever. It is not a deposit. He would need to lie to the bank to get the mortgage. That's what makes it fraud.

Threepwood · 19 Apr 2012 at 02:16

But.

If they know and trust each other, why can't the seller go to the bank and draw out the deposit, give it to the buyer, who can then go and see if he can get a morgage for the asking price?

Surely that is not fraud?

(he did state in the original post the seller is willing to give him the money up front, obviously if they wont give him a morgage then he gives it back)

Edit: I really dont see the difference between that and, say his Dad, giving him the deposit. And I'm pretty sure there are no laws against paying the asking price, why would a bank mind you paying the asking price if the house has been valued at the asking price?

The Halk · 19 Apr 2012 at 02:48

shadesofgrey said:
But.

If they know and trust each other, why can't the seller go to the bank and draw out the deposit, give it to the buyer, who can then go and see if he can get a morgage for the asking price?

Surely that is not fraud?

(he did state in the original post the seller is willing to give him the money up front, obviously if they wont give him a morgage then he gives it back)

Edit: I really dont see the difference between that and, say his Dad, giving him the deposit. And I'm pretty sure there are no laws against paying the asking price, why would a bank mind you paying the asking price if the house has been valued at the asking price?

Right, what do I know....