When you purchase a property and you put no money in are you sure you are not breaking the law. I have seen many schemes that are not being carried out correctly.
Lets start with the deposit. If your scheme provider is placing the deposit in the solicitor’s client account on your behalf without the proper paperwork then the deposit is treated as a gift and is ILLEGAL.
There is nothing you can put on the mortgage application form other than the truth and if you have been given a deposit then you have to declare it. Any other explanation is a lie and is fraud. If you told them it was given to you then they will refuse your mortgage application.
Also if the schemer provider is gifting you a deposit then be aware there is a massive tax liability that accrues to you. If the tax man finds out about the gift expect a tax bill of 40% of the amount gifted for you to deal with. If you have done 10 x £10k gifted deposit deals then expect a £40k tax bill.
Are you applying full disclosure to the lender? The lender needs to know exactly how the transaction is being done. This means they need to see every flow of funds and where they are coming from. If anything is concealed then the transaction will be deemed illegal and hence fraud. Do not conceal anything from the lender.
The system we use is very clever. I did not think it up (but I wish I did) and I am glad to have access to this scheme. The lender is well aware of where the deposit comes from, it is tax efficient (i.e. no tax liabilities appear) and full disclosure is applied.
You may read a lot about mortgage fraud and no money down schemes on the internet. A lot of the comments are founded on truth as I have seen them first hand with some providers which I will not mention.
If you are in doubt always ask yourself if you are telling the truth on the application form and your solicitor is telling the lender everything that is going on. If this is the case then you have nothing to worry about. If there is any deviation from this then take legal advice