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Buying a house for less than its value?????

Hi

I have a quick question.

If I am a first time buyer buying a house for approx 83k (the owner needs a double quick sale) that is valued at 102k do I still need a deposit?

Thanks in advance
«13

Comments

  • VIGILANT22
    VIGILANT22 Posts: 2,516 Forumite
    Yes....and the mortgage will be based on the purchase priced ..
  • Radiantsoul
    Radiantsoul Posts: 2,096 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Yes.
    The house is worth £83k and so everything will be based on that. I am not sure why you think it is worth £102k, perhaps whoever has told you that has a vested interest.
  • Chinkle
    Chinkle Posts: 680 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Houses like everything else in life are only worth what somebody is prepared to pay for it. So in your case its £83K.

    Your mortgage company will determine if it's worth the amount of your offer, not more. And with that will be the requirement to provide a deposit (nowdays usually at least 10%).
  • dixon1983
    dixon1983 Posts: 13 Forumite
    Part of the Furniture First Post Combo Breaker
    edited 7 February 2010 at 7:03PM
    I'm in a similar position. House is valued at 135k but parents only want 120k for it (to help me and partner out).
    How would we go about getting a mortgage for the 120k without the need of a deposit? (the 15k off the price is the equivalent of parents paying the deposit for us)
  • kai666
    kai666 Posts: 1,431 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    edited 7 February 2010 at 7:12PM
    dixon1983 wrote: »
    How would we go about getting a mortgage for the 120k without the need of a deposit? (the 15k off the price is the equivalent of parents paying the deposit for us)

    Umm, you can't

    I can't imagine many people have paid the asking price for a house in the last year or more, and the deposit required has grown since the financial crisis

    To the first poster, how can you buy a house for less than it's value? Going on your arguement, I and many thousands of people bought a house for less than it's value since the housing crash started
  • What if they were to give us the £15k for the deposit rather than just knocking it off the £135k that we've agreed to pay?
  • barrymung
    barrymung Posts: 638 Forumite
    dixon1983 wrote: »
    I'm in a similar position. House is valued at 135k but parents only want 120k for it (to help me and partner out).
    How would we go about getting a mortgage for the 120k without the need of a deposit? (the 15k off the price is the equivalent of parents paying the deposit for us)

    The only way I can see that you could do it is to buy it off your parents for the full £135K, then after the sale goes through your parents give you the £15k back. You could then use this to pay off some of your mortgage.

    Legal? Probably. Ethical? Probably not.

    There are tax implications to this as parents are only allowed to gift £3000 per year to a child before the tax man taxes an interest. Perhaps they could give you the money spread over five years? Maybe they could buy you £15k worth of stuff for the house?
  • VIGILANT22
    VIGILANT22 Posts: 2,516 Forumite
    Lenders are not keen on vendors deposit are it shows you dont have sufficient funds. Is it a family purchase?
  • Yes. They bought the house 2 years ago and we have lived in it rent free since that period. We've spent a significan amount furnishing and decorating the house in that time. We agreed when they bought the house that we would buy it back off them for the same price 3 years down the line. Just this weekend they have said that they only want 120k for it to help us out again.

    So now we're wondering what the best cause of action is.
  • VIGILANT22
    VIGILANT22 Posts: 2,516 Forumite
    Dixon 1983.....Halifax will do what is known as a concessionary purchase....I think it is now 85% LTV
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