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Buying A Parents House!!

charlotte000
charlotte000 Posts: 4 Newbie
in Mortgages & endowments
Hi Everyone!

Me and my fiancee currently rent. His mum is selling her house, the market value is £100,000, however, she said she will sell it to us for £70,000. We do not have a deposit though? I have been reading about this being called a "gifted deposit", can anyone tell me more about this and whether we will still need a deposit or not?! It is obviously very hard to save for a deposit as we are already paying rent and bills currently.

Thank you very much for your help.

Comments

  • GMS
    GMS Posts: 5,388 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    There will be lenders who allow the equity to be used as a deposit.

    Will your mother in law still live there?

    Speak to a broker to see how to proceed.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • charlotte000
    charlotte000 Posts: 4 Newbie
    She will not be living there anymore. She is going to rent somewhere as she does not want to pay a mortgage anymore.
  • GMS
    GMS Posts: 5,388 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Should be doable then.

    If you use a broker they should sort any issues for you. If you apply direct make sure the lender will accept the gifted equity. They may call it a 'sale at undervalue'.

    Do you have a clean credit history?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • ses6jwg
    ses6jwg Posts: 5,381 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Sorry to hijack the thread but I am also thinking of doing the same, buying a £100k property from my Dad. I can scrape together a 15% deposit.

    Are there any tax implications for him doing this?
  • charlotte000
    charlotte000 Posts: 4 Newbie
    My fiancee has a perfect credit history, mine is rated as "good". Will this be okay?
  • anniecave
    anniecave Posts: 2,479 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    GMS wrote: »
    Do you have a clean credit history?
    charlotte000 wrote: »
    My fiancee has a perfect credit history, mine is rated as "good". Will this be okay?

    "clean" means you haven't been bankrupt or had debt relief orders etc, or CCJs or defaults

    Mortgage providers don't really use the ratings categories that apply more to credit cards - excellent, good, fair. They're more interested in the loan to value ratio, your income etc.
    Indecision is the key to flexibility :)
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Will you have an informal arrangement to repay the £30k to your MIL?
  • bedhair
    bedhair Posts: 84 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Just a word of advice. We did the same and bought from my parents. House valued at £275000 but we bought for £250000. Mortgage company (who did the valuation survey) took the purchase price as the "value of the property" as it was the lowest of the two figures. This obviously increases the LTV and therefore morgage interest rates!
  • GMS
    GMS Posts: 5,388 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    bedhair wrote: »
    Just a word of advice. We did the same and bought from my parents. House valued at £275000 but we bought for £250000. Mortgage company (who did the valuation survey) took the purchase price as the "value of the property" as it was the lowest of the two figures. This obviously increases the LTV and therefore morgage interest rates!

    Which lender was this?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • charlotte000
    charlotte000 Posts: 4 Newbie
    Just to let you know, we have spoken directly to a mortgage advisor who has said this is all doable :) On our incomes we can get upto 180k mortgage and we only need 70k, so hopefully it should be pretty straightforward :)
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