The size of a deposit required is influenced by your credit history, affordability, age and other considerations. Homeowner mortgage deposits can be as low as 5%. In other cases they are more.
The deposit required on buy to let properties ranges from 20% to 40% of the property value. Commercial property loans require a similar-sized deposit.
A gifted equity deposit or gifted cash deposit can be accepted in some cases. This could help buyers purchase property without having any savings available towards their deposit.
A gifted equity deposit can help people buy property from family members using the discount in the purchase price as their deposit. The purchase price must not be inflated by the vendor and in all cases will be verified by the lenders valuation company.
A gifted cash deposit is a transfer of funds to your account from a family member.
In both cases lenders require a letter signed by the donor confirming:
– the funds are not repayable
– the donor will not live in the property
– the donor will hold no interest in the property upon completion.
Vendor deposits and builder deposits will be considered by lenders.