Unusual Situation - Mortgage advice required

gatkin

Hi all,

I am after some advice based on an unusual situation I am in.

This year I plan on buying a house worth £675,000. The situation is that this house is going to be sold to me for £300,000 as it is a family member selling it to me. Because if this my LTV would be 45%. Because of this I am curious as to how a lender would view this, and if they would still require a deposit if the LTV is so low.

Look forward to hearing from you
Gary

ryan86uk

gatkin wrote: »

Hi all,

I am after some advice based on an unusual situation I am in.

This year I plan on buying a house worth £675,000. The situation is that this house is going to be sold to me for £300,000 as it is a family member selling it to me. Because if this my LTV would be 45%. Because of this I am curious as to how a lender would view this, and if they would still require a deposit if the LTV is so low.

Look forward to hearing from you
Gary

Hi,

Sorry if this is not what you want to hear but most mortgage lenders will still require a cash deposit. There may be ways round it i'm not too sure on the ins and outs of this situation. It has been discussed before on this forum. From what I can remember though the last post I read which was similar to your situation they found great difficulty getting a mortgage.


Good luck

GMS

How close a family member is it?

gatkin

GMS wrote: »

How close a family member is it?

My girlfriends Father. He inherited 2 houses, one of which he wants to sell to us.

Wh05apk

Presumably there are no tie-ins from the family member? they are effectively just gifting you £375k?

If so, some lenders will consider, did 2 recently with Natwest very similar situation, albeit with smaller numbers! you will not need to stump up a deposit as they will treat the gifted element as the deposit, you will need to ensure that both the lender and the solicitors are aware that you will not be stumping up the deposit, or they will query it and refer back to lender.

Something to be aware of is the IHT liability, I presume that if they can gift you the £375k, they are quite wealthy and over the IHT threshold, if so and they die within 7 years then the gifted part could be included in the estate and liable for IHT, you may therefore wish to consider lifecover for them for 7 years to the amount of any liability.

Wh05apk

gatkin wrote: »

My girlfriends Father. He inherited 2 houses, one of which he wants to sell to us.

Your girlfriend is looking very attractive!:cool:

GMS

I assume your girlfriend will be party to the mortgage too?

As stated by Wh05apk it is a situation which is doable, depending upon usual criteria for income, credit score etc.

IHT is a consideration.

A broker would be able to help you through this.

P.S Does your girlfriend have any sisters?!!

TrickyDicky101

Sorry this is dragging the post somewhat off-topic, but if a lender accepts the £375k as a gifted deposit (and thus they are in effect agreeing to the £675k total valuation) on what value and at what rate is Stamp Duty liable? £300k or £675k?

gatkin

LOL - Very true, except the mortgage is what I inherit, she just gets to live there

gatkin

Great news, thanks for the reply.
To answer your other question, her sister is getting the 800K house

Gorgeous_George

GMS wrote: »

P.S Does your girlfriend have any sisters?!!

Better still, does dad like fat middle-aged men.



GG