Vendor Gifted Mortgages - what are they?

This enables the buyer to purchase the property where they wouldn’t usually have the means to and encourages those that don’t have the required equity for larger loan-to-value mortgages.  

 

Using a vendor funded deposit can be a good way onto the property ladder for first-time buyers who are struggling to raise a deposit when there is a limited number of high loan-to-value mortgages available. Generally speaking, a vendor funded deposit can only be up to 5% of the value of the property so it’s likely that you will need to use it in combination with your own cash deposit.  

However, some sellers will increase the price of their property to allow for the vendor gifted deposit contribution to be made and there are certain lenders that are becoming hesitant in accepting this sort of arrangement, as it exposes them to larger debt than that value of the property. 

 

For advice on your how you could look at using a vendor gifted deposit, speak to one of our expert advisers who will be able to help you with the next steps.