Buying a house: Is part mortgage, part cash possible with lenders?

ahfh1

Hi,

I have my eye on a house, which was originally valued at £220k, but has now gone to sealed bids at around £240k which I would like to target.

I have a 25% deposit of £55k, and an agreement in principle with a lender to borrow £165k, so total I have = £220k (which met the original asking price). This is the absolute max I can borrow, so extra money has to come from elsewhere i.e. parents!

However since the value has gone up from £220k to £240K (an increase of £20k), I am now short by £20k.

My good old parents have said are willing to give me the £20k to bring the total I have to the required £240k.

But will the lender still offer me the original loan, because technically my deposit is now £55k/£240k = 23%, rather than the 25% required? As originally I told them the value was £220k and I wasn't to know it would go up to £240k.

So would my lender be happy for me to pay partly by mortgage and partly by cash i.e.:

Payment by mortgage: £55k deposit + £165k = £220k
Payment by parent's cash: £20k
Total = £240k

Thanks

malkie76

Your deposit is now £75k which puts you in a different (better?) position with the bank while sitll borrowing the amount you original asked for.

However, I assume your lender will question this increase in 'value' of the property you are looking at. They'd be concerned that instantly after buying you'd be in negative equity, however given the strength of your deposit this won't be an issue.

Talk to your bank and see what they say.

Beyond that, I'd question if this property you are looking at warrants the extra £20k in the current climate.

Mrs_Bumble

The only question is whether the lender will value the property at the new value?? if they don't then you could have problems, Have you checked similar properties on sites like www.zoopla.co.uk

Oh and if it all does go ahead you will be asked for confirmation that your parents don't want a claim on the house and the monies are a gift!

ahfh1

I have done some research and checked the prices of recent sales on similar properties, and checked that the new value is indeed fair.

The reason why the value has gone up is because the agent told me that the house was owned by an old lady who died in it. Her family priced it under market value to generate interest to sell it quickly. It certainly generated interest, as when I viewed the house there were 6 other people viewing the house at the same time!

I'm therefore in the horrible situation of possibly having to enter into offering a sealed bid to match the 'increased value' (based on prices of other properties on the same road).