buying for more than you're lending

baron777red

hi

we have just sold our house, and our buyer has sold theirs, and we have seen a lovely house (vacant possession), which is just over our budget, the building society can give us a mortgage for £100,000 and no more and the house in on for £110,000

weve offered 100,000 and its been refused, so i was thinking of offering to pay the vendors agency, and solicitors fees, which would amount to about 3,000.

or if we were to offer 105,000 can i pay the vendor the extra 5,000 myself (through the solicitors, of course)?

or is there anything else we can do to get the house.

thanks

baron

pinkshoes

Your post is confusing.

In today's house sales, I thought a deposit of at least 10% is required by all lenders, so if the house is £110k, and they're offering to lend you £100k, then where does your deposit come into this? Surely you should have £10k deposit to borrow £100k?

poppysarah

Offer 90
walk away if they won't reduce the price.

baron777red

apologies for the confusion

our mortgage is being ported over, which is a mortgage we took out 4 years ago for £100,000 with 5% deposit, were currently on 0.75% above base rate tracker.

the condition of the portable mortgage dont allow to borrow any extra, if we want extra funds it has to be at todays rate, and 10-15% deposit.

hope this explains it a bit better.

oh and the house has already been reduced from 120,000, and been on the market for about 2 months now.

andys15

Fantastic advice poppy. They have already offered £100000, so you tell them to offer 90000.

poppysarah

andys15 wrote: »

Fantastic advice poppy. They have already offered £100000, so you tell them to offer 90000.

they can't borrow more, so they can't offer more.
The obvious conclusion is to walk away. But the fun could be to offer less and show them that you're not afraid of losing but aren't going to pay over the odds.

Only a peanut brain would want to pay MORE for a house. (apologies to anyone who now thinks I've called them a peanut brain)
Reminds me of the NTNOCN sketch about the tv licence.

baron777red

thanks for the advice, but what if i wanted to offer 105,000, i dont think its a stupid offer, the house was originally marketed at 120,000 when it came on the market 2 months ago. then after a month an no offers it was reduced to 110,000.

i have only got 100,000 from the mortgage, can i make the 5,000 difference up myself.

tek-monkey

Can't you buy the place part mortgage - part cash?

purplebuzz

baron777red wrote: »

our mortgage is being ported over, which is a mortgage we took out 4 years ago for £100,000 with 5% deposit, were currently on 0.75% above base rate tracker.

If you took the mortgage out over 4 years ago, was it on a repayment basis or interest only.

If it was repayment then you would current mortage balance will be less than £100k and therefore you will only be able to port that amount over. However, if it is interest only then your balance will still be 100k and you can put this over, but some lenders have different conditions. E.g. You have to also be borrowing more money on a new rate, or the value of the house that you are buying (porting to) must be greater than your current portable mortgage.

There is no reason, that you can't make up any additional money yourself, this is normally how a deposit works anyway, i..e money from you and money from your lender.

baron777red

thanks purplebuzz, great advice

the mortgage was a 3 year fixed, repayment mortgage, when it came off the fixed it reverted to a 0.75% above base rate tracker, instead of the lenders SVR,

i have spoken to the lender and we can port the product exactly as it was when we took it out, and keep the 0.75% above base tracker, so we have to pay 5% deposit and fina a house for £100,000 or less

purplebuzz

baron777red wrote: »

thanks purplebuzz, great advice

the mortgage was a 3 year fixed, repayment mortgage, when it came off the fixed it reverted to a 0.75% above base rate tracker, instead of the lenders SVR,

i have spoken to the lender and we can port the product exactly as it was when we took it out, and keep the 0.75% above base tracker, so we have to pay 5% deposit and fina a house for £100,000 or less

Ok so from what you have just said, your lender is allowing you to port your existing mortage terms, therefore if you find a house for 105k, your 5% deposit would have to be £5,250, leaving the balance to be mortaged as £99,750 (and this is the figure that your lender will give your solicitor to pay for the house.

Therefore, the difference between what you have sold your house for and what you owe on your current mortage, will be yours (or this may make up some/all of the £5,250 deposit)

Are you sure that is what you lender is willing to do? Who are you with??

We are porting our mortage over, and we can't do this, we had to port over what ever out current mortage balance is on one rate and then borrow more on another rate to make up the difference to what they will lend us altogether.