Mortgages and Complex Deposits

Deposits on mortgage applications are not always straightforward transactions with cash from the buyer’s savings.

Below are some examples of unusual mortgage deposit situations that can be accommodated.

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Yes, you can borrow your deposit.

example

Dad lends his son Tom £40,000 towards his home purchase.

Tom has agreed to pay Dad back over 5 years at £733 per month (so that Dad can make a small return on his money).

Tom, approaches us and we agree a mortgage deal with a suitable lender. The Lender understands that this is a loan so Dad does not have to produce a gift letter.

The Lender checks that the additional loan payments are affordable to Tom in addition to the mortgage payments and other living costs.

Second charge

Tom’s Dad wants to ensure that his funds are safe if Tom ever sells the property. He would therefore like his solicitor to place a second charge against the property to protect his loan.

We are advised of this and agree this with the mortgage lender.

Yes, your Partner can put in cash but not be on the mortgage.

example

Cheryl’s new partner Derek has a poor credit record including defaults on his credit file.

Cheryl has sufficient income to raise a mortgage on her own, but does not have deposit funds.

Derek has deposit funds available from the sale of his flat.

Cheryl wants to move in with Derek, taking the mortgage in her name only, but with Derek providing the deposit. They can then move in together.

We can arrange a mortgage for Cheryl as this situation is acceptable to certain mortgage lenders provided repayment of the deposit funds are not requested.

Yes, your Landlord can provide your deposit?

example

Alexis has been living in her rented flat for 5 years.

Her Landlord is looking to sell the property and Alexis would like to buy it.

The problem is that although Alexis earns sufficient to manage a mortgage she has no funds for deposit.

Her Landlord suggests that as property is valued at £300,000 he can sell to Alexis at £270,000 so that she only needs a 90% loan to value mortgage.

We can arrange a mortgage for Alexis from a suitable lender that is comfortable with this situation.

Yes, your Mother can provide your deposit when you buy her home?

example

Joanna wants to move her family into her mother’s large home and take over mum’s remaining mortgage. Her mother will continue to live in the property.

The property is worth £550,000 and mum has agreed she needs £155,000 to pay off the current remaining mortgage and an additional £100,000 to provide extra income in retirement. She will therefore sell to Joanna for £265,000.

We arrange a mortgage and Joanna buys the property with a £265,000 mortgage based on a valuation of £550,000.

Yes, your friend can provide your deposit

example

Tony needs £20,000 for his mortgage deposit but has little cash. His wealthy friend Alan agrees to give him £20,000 to get him on the property ladder.

We confirm the funds are a true gift and arrange a mortgage with a suitable lender.

Can we help you?

If you are buying a property with a complex deposit situation, speak to our team now. You will be surprised what can be acheived by using the right mortgage lender for the right circumstances.

Further information on mortgage application

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