Need Mortgage, but no deposit

SkyBlue22

Ok, the story in short is that my fiance and I are being offered his dad's house for £100,000. He is moving abroad and needs that much to pay off his mortgage and live abroad.

The house has been valued by two estate agents at £130,000 to £140,000.

We only have 6 months max to get a mortgage however there's no way we're going to be able to have anywhere near a 10% deposit. On top of that the house is a prefab (not brick) and we have been told the bank may ask for an even bigger deposit.

We were hoping there might be some way to convince the bank that the excess equity on the house could do instead of a deposit.

A friend has told me about someone who will put up some of the money for a higher interest rate and we'll pay them back over 7 years.

The problem is I can see the mortgage and repayment to him being more than we can afford.

What choices do we have? Are there any choices?

beecher2

The equity will be counted as a gifted deposit since it is from father to son. Estate agent valuation is unlikely to be the same as a bank's though so you might still be looking at not much more than a 10% deposit. Don't know anything about prefabs - best idea is to see a good whole of market mortgage adviser to find out your options. Definitely don't go down the borrowing from a friend of a friend route though - too risky and too much can go wrong

maninthestreet

A prefab house worth £140K !!!???

SkyBlue22

Thanks Beecher.

Maninthestreet, yes, a prefab house worth £140k. Not all prefab houses look like junk sites.

GMS

What is the name of the construction type? Some are acceptable and some are not. If it is classed as defective then you will struggle to get a mortgage.

herbiesjp

The equity could indeed be classed as a family gifted deposit.

The property build will impact on the numbers of lenders available to you.

Best bet would be to discuss the scenario with a good whole of market broker.

nirey666

there are many misconceptions on this site about prefab houses, in my experience. Whilst buying one I got some good and some not so good advice. Its best to try and weed out people with actual experience. It is correct that the type will matter. Our house is BISF we have had new windows and new structherm cladding. We also have decran tiled roof which adds to performance.

Ours was structurally surveyed - sound.
Abbey national gave us a mortgage smoothy with no issues at all. In our area i have recently heard of BOScotland, Yorkshire and Nationwide giving mortgages.

Although we did not pay 140k, our house is in a lovely area with unbeliveable views. The house is roomy and spacious and the houses are mainly snapped up before they even reach the market.

I know this doesnt help with your mortg problem i just thought i'd add it in.

Good Luck.