Vendor Funded Deposit

Vendor Funded Deposit

Vendor Funded Deposit – Vendor funded deposit refers to instances in which the seller of a property funds the deposit of their property, on behalf of the buyer. The primary advantage of a vendor funded deposit is that it encourages buyers to purchase the property. Also, the use of a vendor funded deposit encourages those without the equity requirements for larger loan-to-value (LTV) ratio mortgages available to them to capital raise. Using a vendor funded deposit can be especially important for first time buyers who may struggle to raise enough cash for a deposit, especially when there are fewer high LTV ratio mortgages available. 

However, there may be instances in which lenders do not recognise a vendor funded deposit as lower than the valuation price. In these cases, lenders may recognise the reduced price from the vendor as the final valuation price, rather than a higher price with the deposit paid. Generally, a vendor funded deposit can be no larger than 5% of the value of the property, so may need to be used in conjunction with a cash deposit by the borrower, in circumstances where a vendor funded deposit is accepted by a lender.

It is especially important when looking for a mortgage to use a specialist mortgage broker with years of experience and thoroughly professional business acumen, to be assured that you are in safe hands. Capital Fortune has a proven track record for excellence, and we treat all of our clients with high levels of respect and support. Whatever your specific mortgage requirements: whether a buyer interested in properties with a vender funded deposit, or a seller looking for innovative ways to expand your property portfolio, Capital Fortune are the people to talk to.

Call our mortgage broker team now on 020 77 100 400 or complete the Mortgage Enquiry Online. As part of our service, we will call you back.  

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