Is it possible to buy a house off your parents with no mortgage?

SunFlower

Thanks for the advice, guys - PPI was what I thought would be one of the main issues as well. It currently doesn't look like it will be an issue in any case, but your advice has been appreciated.

Sorry it has taken me so long to get back to you to say thanks, but you rock.

kingstreet

Is the only issue the deposit? Is there any other reason why you won't/can't get a mortgage?

Would she be prepared to give up a part of the equity in the property to make a deposit for you?

If that was the case, you could carry out a purchase at undervalue using a normal mortgage.

ie Property value £100k, you purchase for (and she gets) £85k and the 15% difference is your deposit.

SunFlower

kingstreet wrote: »

Is the only issue the deposit? Is there any other reason why you won't/can't get a mortgage?

Would she be prepared to give up a part of the equity in the property to make a deposit for you?

If that was the case, you could carry out a purchase at undervalue using a normal mortgage.

ie Property value £100k, you purchase for (and she gets) £85k and the 15% difference is your deposit.

Just out of interest, could you do that or would you get nobbled for avoiding inheritance tax etc.?

And it would be one of the issues. I think the major problem for me (and her) would be making sure that in the case of unemployment etc. that I could keep up the repayments as I guessed that PPI protection might be hard to get. However, things seem to have moved on from that hypothetical situation and it doesn't look like any of the above will be relevant any more.


Thanks for your help, kingstreet, and everyone else! :beer:

kingstreet

A purchase at undervalue is perfectly acceptable. You would be able to insure against losing your job as you would have a mortgage arranged on commercial terms.

With a gifted deposit like this, it's possible it may be treated as a PET if your parent dies within seven years of making the gift. The estate would have to be worth more than £325k to make this an issue though.