Do you need a deposit for a Mortgage?

Nix1982

Im able to buy a house for 40k (worth about 80k) would i still need a mortgage as the value of the house is alot higher than the price I need to pay?

Nick

ILW

Sorry, do not understand what you are asking.

Nix1982

Would I need a deposit, to get a mortgage which would cover the cost of the house above (House price is 40k, (but its worth 80k) as I would be buying off someone I know thats why so cheap

ollski

You won't need a mortgage if you have a 40k deposit :-)

LilacPixie

you need a deposit according to the price you pay. in your case 40k so a minimum of 4k plus costs

HappyMJ

The value of the house is £40k. It could be worth £80k at some future date but today it's value is the price which you pay. So yes you will need a deposit and for this low value you will find it diffcult to get a mortgage much less than 75% of it's value. If you are buying from a friend why don't you buy it for £60k with a £15k deposit borrowed if need be. Then once complete get your friend to give you the £15k back so you can pay off the short term loan. Or a gifted deposit (but they are frowned upon).

Nix1982

HappyMJ wrote: »

The value of the house is £40k. It could be worth £80k at some future date but today it's value is the price which you pay. So yes you will need a deposit and for this low value you will find it diffcult to get a mortgage much less than 75% of it's value. If you are buying from a friend why don't you buy it for £60k with a £15k deposit borrowed if need be. Then once complete get your friend to give you the £15k back so you can pay off the short term loan. Or a gifted deposit (but they are frowned upon).

So because the price is low I will struggle to find a mortgage? this is crazy :S

So what is the Min deposit you need

Thanks for the Advice

ILW

Why is your friend giving away £40,000?
Sounds a bit fishy.

HappyMJ

Nix1982 wrote: »

So because the price is low I will struggle to find a mortgage? this is crazy :S

So what is the Min deposit you need

Thanks for the Advice

Because the market rate should be higher and therefore sounds fishy. 15% is the minimum deposit for a good mortgage deal at the moment. I'd suggest more if possible. You can buy with a 10% deposit but the deals aren't yet competitive and it's worth not doing and continuing to rent.

Nix1982

HappyMJ wrote: »

Because the market rate should be higher and therefore sounds fishy. 15% is the minimum deposit for a good mortgage deal at the moment. I'd suggest more if possible. You can buy with a 10% deposit but the deals aren't yet competitive and it's worth not doing and continuing to rent.

Christ, will take me ages to get that much

HappyMJ

Nix1982 wrote: »

Christ, will take me ages to get that much

You can borrow it on a credit card. £40,000 isn't much to pay back. £6,000 on a credit card will cost you about £1,200 per year in interest only £100 per month. The interest on a £34,000 mortgage will cost you £130 per month. Pay the mortgage slowly (interest only) and the credit card as fast as possible. You'll need to do a SOA to see whether it's worth doing or not. You seem convinced the property is worth double so is it or isn't it?