Buying house from parents

Heb162

Hello Everyone

Looking for a bit of advice please. I will just run throygh our situation and see if what i am trying to do is possible.

My mum and dad bought a run down house for us at £125,000 they paid cash so we could get the sale as there was a lot of builders also putting offers in. They now own the house and we have done the house up with our money, which should make the vaule around £160.000 ( other houses on the road go for about £175.000.

My mum and dad as going to gift us a 10% deposit and then we are going to by the house from them. so effectively they are only taking £112.500 back out the house.

My question really is can we get a morgage at 70% LTV? my parents will not actually be able to give this in cash but it will be in the house.

I hope i have given enough information any advice would really help.

Thanks

GMS

Yes you should be able to do this. You are looking at a purchase at undervalue. Use a broker or ensure that any lender is fully aware of the transaction details.

TrickyDicky101

Gifted deposits parents to children are acceptable to more providers than "developer to 3rd party buyer" transactions I believe.

You would need sufficient income to support such a mortgage (and this means sufficient in the mortgage provider's eyes, not yours).

Do your parents have an accountant? They would be making a chargeable gain on the disposal which would be accessible against current market value versus original purchase price and allowable expenses. This is complicated by the fact it is your money (not theirs) that has been used to improve the property since purchase. This really does need the involvement of a competent accountant to ensure they don't end up needing to pay the taxman any money.

Heb162

Thanks for you replys my mum and dad do have an accountant so i will ask them. I will also go through a broker. We earn enough to lend about £170.000 with most lenders so that side of things should be a problem.

Thanks again!