Can I do this, is there a better way?

markwell

Hi
I currently am a homeowner with a 149,000 pound mortgage.
My grandmother has offered to sell us her house which she owns with no outstanding mortgage for £120,000, the house in question is worth around £165,000. We would like to buy the house, but we do not have any deposit, but we have been discussing this and have come up with an idea, but we are not sure if it is feasable, or legal?!

1. Sell our house and get the £149,000 to settle exsisting mortgage.
2. Tell the mortgage company that we are purchasing the grandmothers house for £160,000.
3. Borrow £40,000 short term loan from another family member to pay a 25% deposit on the house in order to get a decent mortgage.
4. Put £40,000 deposit down on the house, the mortgage company will then pay the grandmother £160,000. She gets her £120,000 and we pay back the £40,000 loan to the other family member.

Could anyone tell me if the above plan is feasable and if that is how it would/could work? If not is there another way of doing this? We really don't want to lose the oportunity.

Many Thanks for any help in advance.

markwell

bump .

beecher

markwell wrote: »

Hi

4. Put £40,000 deposit down on the house, the mortgage company will then pay the grandmother £160,000. She gets her £120,000 and we pay back the £40,000 loan to the other family member.
.

The mortgage would be for £120,000 so there would be no extra £40,000 to pay back the loan.

I think your gran can give you a gifted deposit - search the forum for more information on this.

markwell

Thanks Beecher

But I don't quite understand.
If the grandmother was selling the house for £160k, where would the other £40k come from to pay her?

Thanks