First time buyer help !!!!

Mrsbettyrabbitt · 15 March 2018 at 9:22AM

Hi I'm lost and could really do with some help.

To break it down we are first time buyers we currently rent our house from our Mother in law, we had the house valued earlier this week and we have told we can have a quater of what it sells for to use as a deposit on our first property.

The house has been valued at £159,950 so we will receive some where between £30,000 & £ 40,000 .

I have spoken to a mortgage advisor /broker type person I'm not sure and we have been given a mortgage on principle.

My question is there fore... do we have have to wait for our mother in laws house (the one we live in) to sell and get our quater before we can actually apply for a mortgage. So if it does sell we have to temporarily move in with parents etc then apply for a mortgage and risk being declined and then being stuck with??

Or can we wait till we get an offer on this place , then faint a property and make an offer ourselves If our offer is accepted apply for a mortgage and if it's accepted continue with the sale on our place (mother in laws place) But if oir application for a mortgage is declined then pull out of the sale completely and just stay where we are??

my worry is we sell up and then not be able to get a mortgage so end up living with parents and having to find another property to rent ?? And with kids and animals it's not easy ??!!

Any help would be much appreciated I don't believe our credit reports are great that's why I'm concerned about securing a mortgage.

Thanks

elverson · 15 March 2018 at 9:59AM

The difficulty is that the lender (and solicitor acting for them) will want to see proof of a deposit first which you won't have until your parents' house sells.

Also if the house sells for less than you are expecting (which you won't know until exchange) then this will affect what you can borrow for your mortgage.

Richard_Pia · 15 March 2018 at 10:19AM

You wouldn't necessarily need to have evidence of your deposit to obtain a mortgage offer (the lender's gifted deposit form should suffice), but a solicitor would likely require something (for anti-money laundering purposes) prior to the completion of your purchase. In the first instance I would liaise with a solicitor (the one you would use for the purchase) and ascertain what evidence would be acceptable for their requirements - perhaps a letter from your mother-in-law stating her intention to gift you the equity on sale?

If you have obtained an agreement in principle already, then this would suggest that you've already passed the lenders credit scoring, so this shouldn't be a major concern.

Lilla_D · 16 March 2018 at 5:49PM

When someone is selling and using the funds as deposit on the next property, it's normally enough to supply memorandum of sale (proving the sale price) and mortgage statement (showing the balance, if there is one), so the difference is the money the client will have and could potentially use toward the deposit.

However, in this case you'll get the money as a gift, so as Richard says, you'll need a gift letter from your mother-in-law and further proof (e.g. memorandum of sale or solicitor letter), if the bank asks for it. You don't have to wait with a mortgage application until you physically get the money, but you shouldn't exchange contracts on your purchase before your mother-in-law's sale has also exchanged contracts guaranteeing the sale.

enthusiasticsaver · 16 March 2018 at 6:43PM

The difficulty with this kind of scenario is that although you are first time buyers you are dependent on your mother in laws house selling and exchanging at the same time. This may make you unattractive as buyers when it comes to offers as you are going to be in a chain which other first time buyers wont be.

You will need a letter from your mother in law stating that she is gifting you the money. Have you just considered buying the property you are living in for 75% of the value?

First time buyer help !!!!

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