buying house from parents

seren17

Hey,

I am looking at buying a house owned by my mother.There is no outstanding mortgage on the house it is owned outright.

I've lived in the property for the last 6 years, she is happy to sell it to me at a reduced rate taking into consideration what i've spent on the house so far etc

Are there implications re getting a mortgage?
I am a first time buyer, will I still need a cash deposit if I am purchasing the house for 50% it worth?
The property is valued at less then £100,000

Or is it going to be easier to transfer the house into my name and deal with finances after?

Any advice would be received gladly

lincroft1710

If house is in your name then first question mortgage lender will ask is "Why do you want a mortgage on a house you already own?". So you will have to see if they will agree to loan money in circumstances which are not the usual way of buying a house. It is probably far easier to get mortgage first then buy house.

There are other implications involved with such a sale and hopefully someone more experienced will answer.

seren17

thanks, what you say is logical

skiTTish

It could get very complicated if your mum ever needed to go into a care home
You could get chased up for the costs ,as selling the house to you could be seen as a way of avoiding paying for care

00ec25

deprivation of assets is explained (in the English context only) here - it's a pdf from age concern

seren17

Very interesting and all quite complicated I think!

Im wondering if the concerns are the same if the house she would be selling is her second home not her main residential home?

This whole subject seems a lot more confusing than i thought !!

00ec25

seren17 wrote: »

Im wondering if the concerns are the same if the house she would be selling is her second home not her main residential home?

Ok - this is relevant information and changes the whole picture enormously!!

1. She will absolutely have to pay CGT on the sale of her second home. Furthermore, since she is selling to a family member at a discount to market value she will be taxed on the notional value of the property not its actual selling price to you. Ie 18% less annual allowance on the difference between what she paid for it (or its 1982 value if owned before then :cool:) and what the VAO advise HMRC is the notional market value at time of sale

2. Deprivation of assets will be even more imprtant since sale of a second "home" obviously impacts less on her immediate living arrangements (iue still has "own" home and is more easily sold than her main home

3 re the mortgage - search this forum on "gifted deposit" as this has been discussed recently and may be relevant to you in terms of an LTV mortgage application