Mortgage Deposit

[Faymoore]

Hi

As a property owner I am considering placing my property on the market early 2012.
(Value circa 120000 / 125000)

My understanding is that most first time buyers, securing a mortgage would need to find at the very least, a 20% deposit

I am considering the option of "providing" the required deposit as a loan say for a 2 3 or 4 year term.

Does anyone have any comments regarding this idea?

I am particulary interested to know how I would secure the necessary repayment?

Thanks

Dave.

[New Homes Expert]

Security would be the house!

£125k should be do-able fro most FTB without your help.
If they cant find £15k they should'nt be buying!

[Faymoore]

Thanks for your reply N.H.E.

I suggested the deposit idea in an attempt to assist the sale.

I guessed that I could probably arrange for a charge on the deeds or something similar but was not sure.

Thanks again.

[Jeannie D]

Your intentions are good, Faymoore, but if you provide a loan for the deposit, this would have to be declared by the FTBs to prospective mortgage lenders and might - depending on their individual financial circumstances - affect the "affordability" aspect of their mortgage application. I think mortgage lenders would be wary of any arrangement that would require a second charge on the deeds right from the outset.

On the plus side, your home would be in the "very affordable" range and providing everything else about it was sound, it might have a much wider market than just FTBs - for example, those who are downsizing or looking for a buy-to-let investment. In other words, there is a very good chance that potential buyers would be able to raise the necessary deposit by conventional means.

[Faymoore]

Jeannie D

Thank you for your considered comments.

Regards
Dave.

[ComareTheMortgageMarket]

There are also 90%-95% deals available too. Lenders would not allow the vendor to gift any deposit (unless it was family).