If you're planning on buying a house at any stage in the near future, it might be a good thing to familiarise yourself with the term Gifted Vendor/Deposit Mortgages. While it sounds like a tongue twister, they actually offer prospective new home buyers an excellent solution should they come up a little short on the money front.
Generally used mainly by first time buyers, Gifted Deposit Mortgages offer people without sufficient savings to pay for the deposit on their new home the option to receive money from a family member (restricted to father, mother, sister, brother, aunt, uncle, wife or husband only) to assist them.
The terms of these Gifted Deposit Mortgages state that the money given by the family member must be totally non-refundable, and it must be brought to the attention of both the solicitor overseeing the purchase of the property and the lender providing the mortgage.
Similar terms apply to Vendor Deposit Mortgages, but instead of the money coming from a family member, it is offered by way of a discount of the property's market value by the property owner. In this case the lender involved will often demand a deposit of at least ten per cent from you, the home buyer.
In many cases, lenders are reluctant to offer customers mortgages based on vendors gifts due to the fact that it can be so tough to accurately confirm the real market value of the purchase price in lieu of the vendor gift.
If you are interested in buying a new home and the idea of Gifted Vendor/Deposit Mortgages appeals to you, you should arrange a meeting with your local financial institution to discuss the topic further with them.