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Vendor Paid Deposits
Confused_FTB
Posts: 1 Newbie
My partner and I (first time buyers) have been approved a mortage with halifax of up to 170,000. His parents are having to put their house up for sale, and we are interested in buying it. They bought the house for around £65,000 (ex-council) however it needs a lot of work doing on it. They are having it valued this weekend. What i want to know is the following:-
If we offered them say for example 75,000 for the house (if they are willing to accept this etc), how would we go about getting a 110,000 mortgage (the extra on top being to make improvements etc)?
Another thing is - we will only have around £6,000 saved for a deposit. Would a 5% vendor paid deposit work in this situation, and if so how?
Any advice greatly appreciated
If we offered them say for example 75,000 for the house (if they are willing to accept this etc), how would we go about getting a 110,000 mortgage (the extra on top being to make improvements etc)?
Another thing is - we will only have around £6,000 saved for a deposit. Would a 5% vendor paid deposit work in this situation, and if so how?
Any advice greatly appreciated
0
Comments
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I assume (but you will need to check) that the house is out of the discount pay back period and there is no obligation to offer it back to the Council at market price.
In theory if the parents are prepared to accept £75000 for the house a lender might lend you £110K based on a value of £170K, but this only works if the base their lending on loan to value ratios rather than loan to price. Some take the view that they will not lend more than their ratio on the price. If they will lend on value then 110/170 is 64.7% so issues about deposits are irrelevant.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0
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