More on buying without deposit
Author: Andy Bedford » Publish Date: 21 July 2009
I wrote a couple of weeks ago about the number of enquiries mortgage brokers receive about buying without a deposit.
But I forgot to mention a couple of other important ways to buy without a deposit in my previous post.
Firstly it is possible to arrange a gifted deposit from relatives; or even possibly another interested party, using a contract which entitles them to a specific share of the property. This contract would allow you to buy the interested party out at your choice; or give them a share upon any sale.
This device gives the giftor a legal right to some of the sale proceeds, even if values continue to fall, and much more certainty of receiving their gift back in the future.
Also, those who are lucky enough to have the right to buy a council property may be able to buy without a deposit as well because many lenders will accept the discounted value of the property as the deposit as long as their valuation reflects the council’s figures.
However, if you are eligible for a Right to Buy but live in a council flat, don’t get too excited, as many lenders are restricting their exposure on flats due to the flood of 1-bed properties built during the boom.
So if your property isn’t a house, it is a good idea to speak to a mortgage advisor and see whether a deposit will be required.