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buying from family no deposit
shell_83
Posts: 7 Forumite
Hi I hope someone could advise as i don't want to get my hopes up if not possible.
We own a property which has dropped so much we will only cover our outstanding mortgage but need a bigger house. a family member wants to sell their property to us for 190 they will accept 155 now and the balance in monthly payments until we come to sell when we will pay full balance. our mortgage advisor has said we can get a mortgage for 155 without a deposit as we will have equity in the house.
My questions are:
firstly is this true? do we have equity if we still owe the balance? could this be a seperate loan so we do have the equity?
We own a property which has dropped so much we will only cover our outstanding mortgage but need a bigger house. a family member wants to sell their property to us for 190 they will accept 155 now and the balance in monthly payments until we come to sell when we will pay full balance. our mortgage advisor has said we can get a mortgage for 155 without a deposit as we will have equity in the house.
My questions are:
firstly is this true? do we have equity if we still owe the balance? could this be a seperate loan so we do have the equity?
0
Comments
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No, not really, it would be classed as a gifted deposit, at leat your mortgage advisor would put it through as such. If the lender finds out you would still owe the balance then there would be no deal. One of the conditions is to prove the deposit is not to be repaid. If your relatives declare this, then chase you for it, it could be classed as mortgage fraud.0
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What is the value of your property (what do expect to sell for?)
How much is your mortgage?0 -
What is the value of your property (what do expect to sell for?)
How much is your mortgage?
our house would sell for 125 we owe 127 (bought for 140)
we want to buy new property for 190 have mortgage for 155 (our max allowed) pay back 35 in monthly payments and when we come to sell
we have 8k for fees and balance of original mortgage0 -
Have you lived at your current house long? Even buying at £140,000 you don't have a huge amount of equity including your deposit. Have you checked what repayment fees may be relevant on your mortgage? If you haven't had it long and are on a fixed period these may be quite high.0
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Have you lived at your current house long? Even buying at £140,000 you don't have a huge amount of equity including your deposit. Have you checked what repayment fees may be relevant on your mortgage? If you haven't had it long and are on a fixed period these may be quite high.
we bought our house in 2007 the fixed period has now ended0 -
No, not really, it would be classed as a gifted deposit, at leat your mortgage advisor would put it through as such. If the lender finds out you would still owe the balance then there would be no deal. One of the conditions is to prove the deposit is not to be repaid. If your relatives declare this, then chase you for it, it could be classed as mortgage fraud.
would it still be considered fraud if we gave the money back as a "gift" when we come to sell?0 -
i dont think i have expained this very well we don't have a deposit, the mortgage advisor has said we don't need deposit as will have equity in the new house due to us having mortgage for 155 and the house being worth 190, however we would need to pay back the differnce to family eventually0
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My understanding on a "purchase at undervalue" from a family member is it's unlikely any of the price reduction can be classed as a repayable loan. If it is, the lender is likely to decline your application immediately.
In addition, this may be problematic if the donor has debt problems as the transaction may fall foul of the Insolvency Act.I am a mortgage broker. 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. Please do not send PMs asking for one-to-one-advice, or representation.0
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