Mortgage Query

D3PO

Thoie wrote: »

As long as the bank/broker/solicitor are aware of the story with the deposit, I don't see how it's fraud.

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The OP's suggestion is to not tell the bank / broket / solicitor of this loan thats the fraudulent part.

If the OP were to tell the bank / broker / solicitor of this loan they would not get the mortgage.

downwithit

D3PO wrote: »

The OP's suggestion is to not tell the bank / broket / solicitor of this loan thats the fraudulent part.

If the OP were to tell the bank / broker / solicitor of this loan they would not get the mortgage.

I will most definitely be telling them. I just asked do they need to see the transaction happen. From the start I have said that I will be paying the 10% direct to the seller. All parties (banks solicitors etc) will be aware of this

caew

I am going through the mortgage application process at the moment and you would not believe the questions the bank is coming back with. They are two weeks now asking us questions, down to individual transactions on our account statements.

If you do go for it be ready to be questioned upside down and inside out on your financial situation.

I think speaking to a broker is a good idea. They will be able to advise exactly what you need to do and if your idea is viable.

I am not legally qualified and I have no idea if it is legal or not. But you might as well find out and I hope it works out for you. Sometimes you have to think outside the box to get what you want!

murphaph

D3PO wrote: »

Thats debateable. If somebody that could get approved for 470k mortgage cant save 30k (or more than a few grand it would seem) then you would have to wonder if they really are best positioned to assess their own affordability.

Yup. Why haven't you been saving yourself is the real issue here OP. You must both have better than average salaries, so why don't you have that 30k saved yourself already? (this is something you need to ask yourselves, not just let the bank ask).

johnnyskeleton

downwithit wrote: »

No but if I slow down before I pass the Gatso Van I will not be caught

Well, to continue the analogy, if this thread were about avoiding Garda speed vans then it would be promptly shut, so if you are looking for advice on how to get away with fraud you won't get it here.

downwithit

murphaph wrote: »

Yup. Why haven't you been saving yourself is the real issue here OP. You must both have better than average salaries, so why don't you have that 30k saved yourself already? (this is something you need to ask yourselves, not just let the bank ask).

I know, I know, I cant answer that question. We should have, but were living it up a little while we were young, and didn't think this day would come around so quick. Sure isn't that always the case you think you will be young forever then you realise you need to do things like settle down get a house, maybe have kids get married etc

downwithit

johnnyskeleton wrote: »

Well, to continue the analogy, if this thread were about avoiding Garda speed vans then it would be promptly shut, so if you are looking for advice on how to get away with fraud you won't get it here.

If my solicitor, bank, broker for one minute feel it is fraud. I will walk away from it. Whats that they say evasion versus avoidance

johnnyskeleton

downwithit wrote: »

Its only fair that they are paid market value, I would not expect to sell it to me less than that.

downwithit wrote: »

as their equity is covered with the €300,000 which is even lower than market value as any independent valuation by the bank will show.

Your story simply does not make sense.

downwithit

downwithit wrote: »

It would be very close to market value and would just be a good buy in the area as opposed to below market value

I think I answered that here.

D3PO

downwithit wrote: »

I will most definitely be telling them. I just asked do they need to see the transaction happen. From the start I have said that I will be paying the 10% direct to the seller. All parties (banks solicitors etc) will be aware of this

The point is you will not be telilng them the full facts. Telling them the 10% will be paid directly to the seller isnt the full facts.

Unless you are telling them that the 10% will be paid back as a loan to the seller over a period of time your not making them aware of the situation.

Obtaining money by deception would be the legal definition of what you have proposed.

downwithit

D3PO wrote: »

The point is you will not be telilng them the full facts. Telling them the 10% will be paid directly to the seller isnt the full facts.

Unless you are telling them that the 10% will be paid back as a loan to the seller over a period of time your not making them aware of the situation.

Obtaining money by deception would be the legal definition of what you have proposed.

Ah sure what can you do, only give it a shot

whippet

The banks will go through your bank statements line by line (I know I went through this in the recent past) .. and they will pick out individual transactions and ask you what they were for. For instance there was a laser card transaction on my statement for a Michelin starred restaurant and the girl in the bank asked what that was for. I told her it was an anniversary dinner .. she circled the transaction in red and wrote 'Anniversary Dinner - once off' .. this would be the copy that the underwriter would get.

The other thing; banks tend not to include - Gifts, Commission, Bonuses, inheritance etc in to account when calculating the amount they will lend. They really want to see the ability to put away the deposit as regular saving, showing a level of financial prudence and responsilitity ... from what you have been saying that you 'should' have been saving .. this will go down like a lead ballon with the bank - it shows an inability to financially plan and will probably suggest going away for a year and coming back with the savings record and applying again.

I know its not what you want to hear .. but the bank's lending practices are 180 degrees from what they were a decade ago !!! .. and rightly so

Thoie

D3PO wrote: »

The point is you will not be telilng them the full facts. Telling them the 10% will be paid directly to the seller isnt the full facts.

Unless you are telling them that the 10% will be paid back as a loan to the seller over a period of time your not making them aware of the situation.

Obtaining money by deception would be the legal definition of what you have proposed.

I didn't realise that's what he was doing. I thought a third party was lending you the deposit in the short term.

The solicitors (all of them) are extremely unlikely to finish the conveyancing until all monies are paid. Your solicitor won't close until you've paid everything, as that's the only way you can get good title.
The seller's solicitor won't close until she's got all the money, as otherwise she'd be leaving her client open to not getting paid fully.
The bank won't let you draw down the mortgage until all the arrangements are in place with the solicitors (or they could end up out of pocket).

downwithit

Thoie wrote: »

I didn't realise that's what he was doing. I thought a third party was lending you the deposit in the short term.

The solicitors (all of them) are extremely unlikely to finish the conveyancing until all monies are paid. Your solicitor won't close until you've paid everything, as that's the only way you can get good title.
The seller's solicitor won't close until she's got all the money, as otherwise she'd be leaving her client open to not getting paid fully.
The bank won't let you draw down the mortgage until all the arrangements are in place with the solicitors (or they could end up out of pocket).

Just to clear things up. I am due a payment of €38,000 but it will come through in about 12 months.

I am looking to buy a house off a relative now. Sale price agreed at €300,000 (market value). I do not have the full deposit together. I want to pay 10% deposit from me to the seller (as I don't have it just yet my brother would give me this €30,00 and I pay him back interest free when my €38,000 comes through. The 90% loan of €270,000 would come from a bank in the form of a mortgage.

Seller gets full €300,000, banks loan on 90% of the property value. Solicitors are free to close on sale as all finance cleared.

I do not see any of this as deception just family helping each other out.

D3PO

downwithit wrote: »

Just to clear things up. I am due a payment of €38,000 but it will come through in about 12 months.

I am looking to buy a house off a relative now. Sale price agreed at €300,000 (market value). I do not have the full deposit together. I want to pay 10% deposit from me to the seller (as I don't have it just yet my brother would give me this €30,00 and I pay him back interest free when my €38,000 comes through. The 90% loan of €270,000 would come from a bank in the form of a mortgage.

Seller gets full €300,000, banks loan on 90% of the property value. Solicitors are free to close on sale as all finance cleared.

I do not see any of this as deception just family helping each other out.

You will be asked about where the 30k came from as part of the application process. If you state its a 30k loan from your brother then its not deception.

If you state its a 30k gift from your brother it is.

If you do the latter then it is fraudulent. Regardless of what arrangement you have and what way you can handle this repayment with your brother.

Thoie

downwithit wrote: »

Just to clear things up. I am due a payment of €38,000 but it will come through in about 12 months.

I am looking to buy a house off a relative now. Sale price agreed at €300,000 (market value). I do not have the full deposit together. I want to pay 10% deposit from me to the seller (as I don't have it just yet my brother would give me this €30,00 and I pay him back interest free when my €38,000 comes through. The 90% loan of €270,000 would come from a bank in the form of a mortgage.

Seller gets full €300,000, banks loan on 90% of the property value. Solicitors are free to close on sale as all finance cleared.

I do not see any of this as deception just family helping each other out.

So I was right the first time - the loan (for the deposit), is coming from a third party (your brother)? Sorted. He renounces any claim on the property, it should all be grand.

D3PO

Thoie wrote: »

So I was right the first time - the loan (for the deposit), is coming from a third party (your brother)? Sorted. He renounces any claim on the property, it should all be grand.

Grand except that the 30k loan will very seriously impact affordability calculations for the mortgage application to the point the OP is unlikely to get the amount needed.

The OP has also indicated he doesnt intend to describe the 30k as a loan but instead a gift which is not infact the case.

downwithit

D3PO wrote: »

You will be asked about where the 30k came from as part of the application process. If you state its a 30k loan from your brother then its not deception.

If you state its a 30k gift from your brother it is.

If you do the latter then it is fraudulent. Regardless of what arrangement you have and what way you can handle this repayment with your brother.

Why consider it deception?

Nobody looses out here.

Seller gets the market price for her house
Bank get a mortgage on a house with good equity
I get my house
My brother gets his money back

downwithit

D3PO wrote: »

Grand except that the 30k loan will very seriously impact affordability calculations for the mortgage application to the point the OP is unlikely to get the amount needed.

The OP has also indicated he doesnt intend to describe the 30k as a loan but instead a gift which is not infact the case.

Affordability of the mortgage does not come in to it. I am happy with the repayments of the €270k loan. I will not need to add repayment of the 30k deposit on top of this as it is coming in one lump in 12 months time and will not over stretch my monthly outgoings

caew

When I bought my first house my dad lent me 50k, he had to sign to say that it was a gift and he had no interest in the property.

In fact in was a loan, he was making an investment and I was paying him back plus interest. In total I paid him back 70k.

All the bank needed to know was that he was not going to stake any claim in the property. Which he was happy to declare/

Anything after that was a private matter between myself and himself, nothing to do with the bank. If I defaulted on my loan from him he would have had to sort that out with me and therefore he was taking a leap of faith that I wouldn't let him down.

I didn't, he got his money and I got my house and the bank got their mortgage paid.

D3PO

downwithit wrote: »

Affordability of the mortgage does not come in to it. I am happy with the repayments of the €270k loan. I will not need to add repayment of the 30k deposit on top of this as it is coming in one lump in 12 months time and will not over stretch my monthly outgoings

I totally get what your saying and a normal rational person could understand it too and as such apply common sense then to your application on that basis.

HOWEVER

Banks underwriting policies dont allow for creative thinking especially now since the financial crisis started. They have stringent lending policies and cant account for your situation in them.

Dont get me wrong I get what your trying to do I cant see personally why it couldnt be considered a reasonable way of doing things but I have to respond from the perspective of how this would be treated by a bank / broker and solicitor. However trying to circumvent their underwriting ppolicies weather you are doing so with a genuine will to decieve to gain financially or not is still fraudulent.

its like the solicitor / judge that got done last year. Said person deceptively got money by using clients assets to secure loans for herself. Her intention was never to rob the money she was trying to make a quick buck in the rising price of properties but when the crap hit the fan she got stung bigtime.

Now Im not trying to compare the two but my point is you nor her had any intention to defraud the bank but circumventing underwriting policies you were just trying to grease the wheels of beuracracy.

However as they say the road to hell is paved with good intentions.

downwithit

caew wrote: »

When I bought my first house my dad lent me 50k, he had to sign to say that it was a gift and he had no interest in the property.

In fact in was a loan, he was making an investment and I was paying him back plus interest. In total I paid him back 70k.

All the bank needed to know was that he was not going to stake any claim in the property. Which he was happy to declare/

Anything after that was a private matter between myself and himself, nothing to do with the bank. If I defaulted on my loan from him he would have had to sort that out with me and therefore he was taking a leap of faith that I wouldn't let him down.

I didn't, he got his money and I got my house and the bank got their mortgage paid.

This is the way I see it happening. I was hoping someone that has experience of this might comment.

Did the bank consider it deception or fraudulent?
Did you solicitor have any issue?

loyatemu

I think you'll have trouble getting a big enough mortgage without a deposit however you spin it. Banks are not interested in parental loans or guarantees, gifts, future income & inheritances or any of the other guff people used to get inflated mortgages in the "good times".

They're interested in your current income and savings, and they may also take into account the likelihood that you may have kids in the future with a consequent increase in expenses and drop in income on the part of one of the couple. I'd be doubtful you can get more than 3 x 1 salary and 1 x the other.

caew

No, there were no issues in my situation.

The solicitor and the mortgage broker were aware of the situtation and just asked for the declaration from my dad to give to the bank.

As long as there was the signed declaration that the person who has gifted me the money will not stake a claim in the property they were happy. The bank were happy that was where the 50k came from and raised no issues about it.

The rest was between myself and my dad, my dad was the one taking the risk then, not the bank.

I will add in case it is relevant that this was in 2002.

D3PO

caew wrote: »

No, there were no issues in my situation.

The solicitor and the mortgage broker were aware of the situtation and just asked for the declaration from my dad to give to the bank.

As long as there was the signed declaration that the person who has gifted me the money will not stake a claim in the property they were happy. The bank were happy that was where the 50k came from and raised no issues about it.

The rest was between myself and my dad, my dad was the one taking the risk then, not the bank.

I will add in case it is relevant that this was in 2002.

Of course the solicitor and the mortgage broker and bank were happy with it. You declared it as a gift when it was not.

This is the crux of the matter.

downwithit

I think were losing track here. The question was can it be done. Not is it the correct thing to do.

D3PO

downwithit wrote: »

I think were losing track here. The question was can it be done. Not is it the correct thing to do.

I dont think we are losing track.

Your essentially asking can you decieve the bank. Its against Boards rules for somebody to answer this for you and explain how best to do it.

caew

D3PO wrote: »

The fact of the matter is that you and your father acted fraudulently. On top of which not declaring the income from interest (which Im sure your father didnt do) was also tax evasion.

I know you probably think my reply is hardline and what happens between two family members should be nobodies elses business but their own.

The law may be an ass at times but it is still the law and should be abided by.

I would suggest that you withdraw your accusation that I or my father have acted fraudulently.

How do you know what my father has declared to Revenue, and how dare you suggest that he is not tax complient. How are you 'sure' he didn't?

You are giving legal and tax advice on something you clearly know nothing about.

My solicitor, who I am sure is more qualified than you, gave legal advice at the time.

If you check the Revenue website you will see that parents can gift children money and vice versa and this falls under capital acquistions tax and the thresholds are available on the Revenue website. The thresholds are slighly different now to 2002 but as you can see a parent can receive up to 220k at the moment without paying tax and it has varied between this and 440k over the past few year.

Therefore, your accusation that my dad is a tax evader is without merit. Try to educate yourself with some facts before you throw around accusations which may land you in hot water.

caew

D3PO wrote: »

Of course the solicitor and the mortgage broker and bank were happy with it. You declared it as a gift when it was not.

This is the crux of the matter.

All the bank want to know is that the person supplying the money does not have a legal interest or will stake a claim in the house.

My daad didn't, he said it, end of.

D3PO

caew wrote: »

I would suggest that you withdraw your accusation that I or my father have acted fraudulently.

By declaring the money as a gift and not a loan you did act fraudulent based on the definition of the word. You went out of your way to keep from the bank that it was a loan. I didnt make up the wrod or the definiton but its in the dictionary for you to see.

How do you know what my father has declared to Revenue, and how dare you suggest that he is not tax complient. How are you 'sure' he didn't?

I will retract that and say that I suspect he didnt.

You are giving legal and tax advice on something you clearly know nothing about.

My solicitor, who I am sure is more qualified than you, gave legal advice at the time.

If you check the Revenue website you will see that parents can gift children money and vice versa and this falls under capital acquistions tax and the thresholds are available on the Revenue website. The thresholds are slighly different now to 2002 but as you can see a parent can receive up to 220k at the moment without paying tax and it has varied between this and 440k over the past few year.

Therefore, your accusation that my dad is a tax evader is without merit. Try to educate yourself with some facts before you throw around accusations which may land you in hot water.

You are correct regaridng CAT. However paying interest on a loan is not a gift. Perhaps you should understnad what constitutes a gift in regards to CAT

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