100% mortgages

[The Wookiee]

I understand that if you can get a Below Market Value property, which are availble from various places, you could finance the purchase on a No money down deal as detailed below.


Value of the property £160,000
Purchase Price £120,000 (25% below market value)
Equity £40,000
Mortgage for £128,000 (which is 80% LTV )

This gives you £8000.00
Cash back on completion and 20% equity in the property.

Cost of deposit bridging £1,250
Solicitors fees £1000
Brokers fees £145
Survey £320
Buyers agent fee £4,694 (This includes VAT)

Cost to client £8590.00

Cash Back £8000.00

Total Outlay £590.00



I may be totally wrong but does anybody else know how this works

 

[Tricky Dicky]

I understand that if you can get a Below Market Value property, which are availble from various places, you could finance the purchase on a No money down deal as detailed below.


Value of the property £160,000
Purchase Price £120,000 (25% below market value)
Equity £40,000
Mortgage for £128,000 (which is 80% LTV )


I may be totally wrong but does anybody else know how this works

Maybe, but what are the chances of buying a property below market prices ? Almost zero I would have thought, unless you know the seller and get deal. In your example, the mortgage company is lending on the value price NOT the bought price.

 

[The Wookiee]

Maybe, but what are the chances of buying a property below market prices ? Almost zero I would have thought, unless you know the seller and get deal. In your example, the mortgage company is lending on the value price NOT the bought price.

But thats where you are wrong, there are many companies out there that offer genuine BMV properties

 

[surrey jim]

I understand that if you can get a Below Market Value property, which are availble from various places, you could finance the purchase on a No money down deal as detailed below.


Value of the property £160,000
Purchase Price £120,000 (25% below market value)
Equity £40,000
Mortgage for £128,000 (which is 80% LTV )

I may be totally wrong but does anybody else know how this works

I understand where you're coming from with this however if the property is valued at £160k how could it be sold for as much as 25% (or indeed anyhting) less. Why would the banks not see that people were unwilling to pay the £160k odd and therefore value the property less meaning they the mortgage is a higher percentage of the value?? (hope this made sense)

 

[Tricky Dicky]

But thats where you are wrong, there are many companies out there that offer genuine BMV properties

I may be wrong, but why on earth would they ?

 

[The Wookiee]

I may be wrong, but why on earth would they ?

Because they recieve quite a fee and they deal mostly with property investors who buy up properties for fun, but they do also deal with your average normal house buyer

 

[The Wookiee]

I understand where you're coming from with this however if the property is valued at £160k how could it be sold for as much as 25% (or indeed anyhting) less. Why would the banks not see that people were unwilling to pay the £160k odd and therefore value the property less meaning they the mortgage is a higher percentage of the value?? (hope this made sense)

You will be amazed what people will sell their properties for if they want a really quick sale!!!

 

[Tricky Dicky]

You will be amazed what people will sell their properties for if they want a really quick sale!!!

Quick sale I understand but it is still market forces, supply and demand. Nobody is going to settle for less money than they could get from someone else, given the circumstances.

 

[seagullsovergrimsby]

I understand where you're coming from with this however if the property is valued at £160k how could it be sold for as much as 25% (or indeed anyhting) less. Why would the banks not see that people were unwilling to pay the £160k odd and therefore value the property less meaning they the mortgage is a higher percentage of the value?? (hope this made sense)

Companies exist that will buy your property if you're facing a repossession or are about to lose your job etc but will only give you 75% of the market value because a very quick sale is needed.

 

[The Wookiee]

Quick sale I understand but it is still market forces, supply and demand. Nobody is going to settle for less money than they could get from someone else, given the circumstances.

You would be surprised !! How long does a property take to sell by an estate agent ?? Quite a while I am guessing. There are loads of people out there that simply dont have the time to wait, eg. divorce, impending repossesion, probate, emigrating or just plain skint !!

 

[The Wookiee]

Companies exist that will buy your property if you're facing a repossession or are about to lose your job etc but will only give you 75% of the market value because a very quick sale is needed.

Exactly and these properties are availble for you and I to purchase from these companies using the example I posted earlier !!

 

[Tricky Dicky]

You would be surprised !! How long does a property take to sell by an estate agent ?? Quite a while I am guessing. There are loads of people out there that simply dont have the time to wait, eg. divorce, impending repossesion, probate, emigrating or just plain skint !!

Maybe you're right - can't say I know. I would have thought "loads" was an exageration, "some" maybe.

I bought one of my properties cheaper than market, but only because the developer is a friend and wanted it to go to someomne he knew as he was keeping some of the block.

 

[The Wookiee]

Maybe you're right - can't say I know. I would have thought "loads" was an exageration, "some" maybe.

I bought one of my properties cheaper than market, but only because the developer is a friend and wanted it to go to someomne he knew as he was keeping some of the block.

No seriously there are loads !!

 

[Tricky Dicky]

No seriously there are loads !!

Sorry, don't really want to get into an argument - althoguh I'm only working, so I have not much better to do.

If there were loads, it would drive the market down. As a proportion of the total, it can't be that big. Anyway, what was the point of this again ... ?

 

[surrey jim]

anyone got any links with properties available /compamnies offering this ??. A quick google seems to suggest many of these want you to sign onto mailing lists/pay up front membership fees etc. -

 

[The Wookiee]

anyone got any links with properties available /compamnies offering this ??. A quick google seems to suggest many of these want you to sign onto mailing lists/pay up front membership fees etc. -

Thats the catch you do pay a fee for membership, however this can be recouped in the savings you make on buying the property

 

[Tricky Dicky]

Thats the catch you do pay a fee for membership, however this can be recouped in the savings you make on buying the property

I'm going to bow out of this now, but this has all the hallmarks of an internet scam.

Savings !! savings !! free money - just register first and pay a fee.

Remember, if it sounds too good to be true, it probably is.

 

[The Wookiee]

I'm going to bow out of this now, but this has all the hallmarks of an internet scam.

Savings !! savings !! free money - just register first and pay a fee.

Remember, if it sounds too good to be true, it probably is.

It is not a con, I know many people who have purchased property in this way and have saved alot of money and also made alot of money too

 

[Uncle Spielberg]

Never.

 

[seagullsovergrimsby]

It is not a con, I know many people who have purchased property in this way and have saved alot of money and also made alot of money too

Agreed , there are companies who can sell you a row of terraced houses up north all with sitting tenants. They make their money by signing you up to ensure that you're a genuine investor and sell you a property at a price well below market value and about 5% more than what they've just paid for it.