Ist time mortage buyer advice needed!

janz101

Hi I currently own a second house, I want to sell this to my son but for a lot less than the house is worth,( he is actually living in it at the moment and wants to buy it off me) to help him get on the property ladder. Does anyone know if there is a lender who would take into account the fact that the house is worth more than he is asking to borrow, so he doesnt have to pay a deposit.

mr_mortgage

janz101 wrote: »

Hi I currently own a second house, I want to sell this to my son but for a lot less than the house is worth,( he is actually living in it at the moment and wants to buy it off me) to help him get on the property ladder. Does anyone know if there is a lender who would take into account the fact that the house is worth more than he is asking to borrow, so he doesnt have to pay a deposit.

Remember, it's LTV - Loan to Value, not loan to price paid. So, yes, in theory if the value of the property is deemed to be considerably higher than the purchase price then a deposit would not be required. I don't think you'll find that lenders will be picky on this one.

Given the second house isn't your primary residence, there'll be some capital gains tax issues - including that the taxman will assume the property was sold for market value, not the amount you actually sold it for.

Brighty

It's usually loan to value or loan to purchase price, whichever is lower. We did this 7 years back and nationwide told us that even though the house was valued at 170k, a mortgage of 100k on a 100k purchase price = 100% mortgage. We got round it by upping the purchase price to 106k making it a 95%, the 6k deposit never really existed and our solicitors where happy about that (ours and our parents were in the same firm), they said there was no point passing 6k round the houses to just end up back with my parents again.

Brighty

skiTTish

Tsb will take it into account ,think they term it as being supplimented by a family gift (ie the amount you knock off ) and will loan to a percentage of the valuation

SelbyJay_2

How would this work with a repo then?

There's a house on the market for £100k and all others around it are worth around £130k. Does this mean that you could get the house with no deposit??

beecher

SelbyJay wrote: »

How would this work with a repo then?

There's a house on the market for £100k and all others around it are worth around £130k. Does this mean that you could get the house with no deposit??

No, as has been stated LTV is based on whatever is lower - purchase price or valuation price. What's being talked about here is a gifted deposit from family which is different.

SelbyJay_2

I thought there was sumat i was missing! Cheers beecher

janz101

Cheers for the feedback folks youve been a big help