We have developed our product criteria to ensure that we are making sound lending decisions based on true property values. Our basic principle for House Purchases is that we will lend on the lower of purchase price (less any discounts), or valuation.

We reserve the right to decline any types of transaction that are found to contravene this principle at any time before release of funds. In particular:

• we reserve the right to refuse business where the seller has owned the property for less than six months.
• we will not accept business involving assignable contracts and sub sale purchases.
• we will refuse business if we believe that connected parties are attempting to sell properties between themselves at inflated purchase prices or at undervalue.

Example of an unacceptable transaction involving a third party
A property investor wants to purchase a property for £70,000 and a connected third party puts up the cash (for a fee). The property investor then applies for a mortgage on the house at the inflated value of £100,000 with the third party named as the vendor. The lender offers 85% of this, or £85,000. This means that the property investor has borrowed £15,000 more than the purchase price.

This is only one example of the types of transaction that are unacceptable to us.

There are still lenders out there that will look at Sub-sales, so its just a matter of checking the criteria before you opt from a mortgage product.

 Regards

Wasim

Please visit our main site Greenlight Mortgage Services Ltd at [1] www.glmsltd.com