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  • Mortgages & Finance

    No money down property scams

    Hi, I was wondering whether any of you could offer some advice. I have been contacted by a company who is offering a fully tenented property in Scotland with built in equity of £60,000. I only have to pay £6,000 inc vat for legal costs and reservation fee. They insist on supplying their own solicitors and mortgage broker. I know that no money down investment offers can be a bit dodgy but on the other hand, if it is a legitimate offer, I don't want to miss out,so any help as to  what I should do would be appreciated
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    Hi Kruti,

     

    The simplest thing to do is explain to them that you will be contacting the lender to see if they find the scheme acceptable.You will most likely find that the sourcing company don't want you to do this.  That gives you your answer. ;)Further reading:  10 reasons why you will never bring a NMD deal (using lenders) to f....If I were you, I would steer well clear.  Once they have got your £6K and the deal falls through, then you won't see that money again.  Of that I am quite sure.You could also watch this video for further insights:

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    hi kruti , if you can afford to put the deposit in you could still secure the deals legally if it is as good a deal as suggested . offer to pay the finders fee and tell them you want to use your own solicitor etc and that you have deposit money . other than that its dodgy territory as NMD deals are as vanessa said illegal in this way.cheers, tam.   ps is the 6k just to reserve the deal with more to pay on completion ? if so tell them to fxxk off
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    Hi guys thanks for you prompt reply. Tom I only have to pay £6,000 and thats it. This covers reservation fee and legal costs. They won't allow me to use my own solicitor,  broker etc. I have spoken to the guy and he said the way this gets approved by the lender is through something called Daylight Bridging on distressed properties??

     

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    There is no lender that knowingly allows "daylight bridging".  Should you use this method to acquire a property, and not disclose it to the lender, you (not the sourcing company) would have committed the serious offence of mortgage fraud.Further reading:  Mortgage fraud - more popular than ever.  Several case studies of people who have ended up in prison for doing what this company is proposing you do.This method would involve the lender being misled into believing that you were buying the property at the gross price, not the net (discounted price).  This is mortgage fraud !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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    Thanks Vanessa et al. I have contacted the Lender who said themselves, no way so its a definite no go! Thanks

     

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    if you still think the deal itself stacks then you could go back to them and say ok will use your solicitors but i will put in deposit as not comfortable with NMD method.. thats if you are happy to put deposit in and remortgage again in 6 months to get your funds back out. what im saying is just because the NMD  system they are using is illegal doesnt mean the deal itself is a no go
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    Yes, Tam is right.  If the deal stacks (and it is more likely to stack by putting in a deposit), then put a 25% deposit in at the net price and buy the property via a legitimate/transparent deal structure.  But hopefully it isn't a flat!! Wink
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    hi kruti wherabouts in scotland is the deal? and are you based in scotland ?
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    Hi Kruti
    You've done the very sensible thing by contacting the lender and asking; well done. Most people won't do that because they want to believe it's legitimate.
    Daylight bridging is doubly dangerous to the investor because there isn't only non disclosure to the lender going on (fraud) but also tax evasion!
    The reason is the company doing the deal will buy the property at say 75k then sell it to you for say 100k creating a fake deposit but they have made a 25k profit on that transaction so it should be declared for tax though of course they don't because 1. the deposit is fake and 2. the profit is fake and 3. if they paid tax the deal wouldn't be profitable to them.
    Is that something you want to get involved in?
    Most of these companies will refuse to let you take the deal in cash as they'll be getting a kick back off the broker commissions too or simply refuse to allow deals to be done in any other way.
    KR, Lisa
    https://www.keys-mortgages.com

    PS Hand on heart who the frig is going to give up 60k equity?!?!
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    Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com