No Deposit Mortgages - Lender Requirements

According to the CML Mortgage Handbook a conveyancer must report to the mortgage company if you will not have control over the payment of all of the purchase -including the deposit- money (for example, if it is proposed that the borrower pays money or a deposit to the seller direct) other than a deposit held by an estate agent or a reservation fee of not more than £1,000 paid to a builder or developer.

Different mortgage companies have different contact points if the conveyancer will does have control over the deposit or payment of all the purchase or mone. Here are a few examples:

A conveyancer must tell each mortgage company if there is no deposit being paid to sellers lawyers or they become aware of any arrangement in which there is:

• a cashback to the buyer; or
• part of the price is being satisfied by a non-cash incentive to the buyer or
• any indirect incentive (cash or non cash) or rental guarantee.

Any such arrangement may lead to the mortgage offer being withdrawn or amended.