How Do You Like a Free Property and Some Free Cash in Uk

[Annete]

This loop hole has been arround many years, i must worn you are committing a crime by lying to the bank, iam not advising any one to follow this example, if you do its at your own risk.

first of all, if you live in uk, you must have seen lots of paper ads about new built discounted property's, 5%, 10%,15% etc.

basically you use the discount as your deposit for the property, solicitor fee, survey fee, etc.

let me give you example how it works,

property is advertised at 100k, and its discounted at 10%, you pay only 90k, you use the 5% as as deposit 1% as stamp duty, 1k as solicitors fee, couple of hundred for search and other you still left with some spare cash,
so basically you are getting a free house and some money in your pocket,

thanks guys

[Katrine]

lol not exactly free. You still got a £100,000 mortgage to deal with lol.

Still thank you very much for sharing. I can see how it would work and it would be a very good technique for someone to get on the housing ladder with house prices dropping and deals/negotiations to be made with all the chicken coup builders (redrow etc).

There must be thousands of brand spankin new houses just sitting there empty cos no-one wants to buy. Deals to be made guys. These people are desperate to sell.

[George]

Not quite as simple as you make out. You cannot simply use a % of the discount to pay fees.

Using you analogy you buy at £90,000 but get a mortgage at £95,000. This cannot work as a straight transaction. You suggest lying to the mortgage company but it is not only you as the vendor and both solicitors would also have to lie.

The way this was traditionally done was to buy at the discount using a bridging loan and then do back to back re-mortgage at whatever %. This works.

Then other way is to use a third party between you and the vendor who buys at the discount and then does an immediate subsale to you at the higher price for which you have the mortgage with a gifted deposit. Obviously the third party needs to be able to buy in the first place and you need to trust them.

I have dealt with both methods and if anyone is interested in a purchase this way pm me.

Bear in mind that lenders do not like any form of a gifted deposit these days nor do they like the back to back remortgage.

[Ema]

How is the property free when you basically got a £90k+ mortgage on your arse