Property with £40,000 in it, can I use as deposit?

iceman28

Hi everyone,
Need some advice please.... My mother has offered me her house, valued at £150,000, she is offering for £110,000. I have no deposit and a couple of loans, can I use the equity in the house as a deposit and to clear my loans?

Thx in advance.

silvercar

Some lenders will be happy with this, it is known as gifted deposit.

As the deposit is coming from a relative, as opposed to from a builder, it is more believable that you are getting the house at a discount rather than a builder over inflating the price to create a false deposit.

A broker will know which lenders will be happy to do this deal.

feisty1

iceman28 wrote: »

Hi everyone, Need some advice please.... My mother has offered me her house, valued at £150,000, she is offering for £110,000. I have no deposit and a couple of loans, can I use the equity in the house as a deposit and to clear my loans? Thx in advance.

Like all mortgages this will be judged on yr affordability.......the deposit (40k equity) is known as a concessionary deposit, depending on yr credit score & the amount a lender is prepared to offer you on a concessionary deposit scheme will determine whether debt consolidation is permitted (ie paying off loans). ...... For example 1 maistream lender would only allow this at 75% LTV & no debt consolidation, which isn't what yr looking for......therefore as suggested it is best to take advice to avoid multiple credit scoring etc..........

getmore4less

iceman28 wrote: »

Hi everyone,
Need some advice please.... My mother has offered me her house, valued at £150,000, she is offering for £110,000. I have no deposit and a couple of loans, can I use the equity in the house as a deposit and to clear my loans?

Thx in advance.

This could be considered equivilent to raising a mortgage on a mortgage free property.
(ie. mother gifts the house, you mortgage and gift the money back)

LTV and affordability should be the criteria.

What size of loans are we talking about that could make or break this.

Something to consider is to have your Mum pay off your loans first so there is no debt conolidation and just pay more for the place if it is affordable.

Have you looked at your budget if you buy the place to be sure you can afford it?

Robert_Sterling_3

silvercar wrote: »

A broker will know which lenders will be happy to do this deal.

Or you could phone up lenders and find out for yourself. :T :T :T