For a First Time Buyer in Nottingham, whilst the days of 100% mortgages are mostly now a distant memory, it can be possible in certain circumstances to buy a property without investing any of your own money. Buying a property under a Right to Buy scheme is a good of example of how this is possible, as is buying from a family member or Landlord when they are offering you a discount from the value of the property on the open market.
In terms of gifted deposits, here are the answers to a few commonly asked questions:
The most popular choices amongst First Time Buyers are usually family members, and it tends to be “Bank of Mum and Dad” that gifts the deposit to the applicant in question. The gift must be evidenced by way of bank statements from the donor, as well as their ID. There are some Lenders that will accept a gifted deposit from a close family friend, which could open up more options for you should you need them.
In almost every circumstance involving a gifted deposit, it needs to be a gift, with a letter (which we can help prepare) signed by the donor to confirm the funds are non-refundable and they will not put a “charge” on the property you are purchasing. As always though, there can be exceptions and we know of at least one Lender that will accept a loan rather than a gift.
Be careful though, as taking out a personal loan just before applying for a mortgage will probably have a very negative effect on your credit score which could lead to a future mortgage application being rejected. The Lender will also take the monthly payments for the loan into account when they are calculating how much they will possibly lend you.
When purchasing a property, there is no minimum or maximum, however there are some lenders out there who will want at least 5% of the deposit to be from your own personal income. Generally speaking, the more deposit you and/or the donor are able to put down for a property you are interested in, the better deal you are likely to get and end up saving yourself money per month on your monthly repayments.