buy relatives house

Hello123_2

Can someone help me understand if it would be possible to buy my parents house from them cheaper than market value? is this mortgagable?

It's their 2nd house - they rented it out for a while.

They want to help me on the property ladder and sell it £20k cheaper than market value. I dont have a deposit.

How on earth does this work/would lenders allow it?

Hope someone can help! Thanks!

[Deleted User]

They can sell you the house at whatever price you agree on, but unless you can find a 100% mortgage, you'll still need a deposit.

CLAPTON

the mortgage company may accept the parent discount as a 'gifted deposit'

you need to speak to a mortgage lender or mortgage broker

sockpuppet

Beacause you are buying it from your parents it is treated as a 'sale under value' and the £20k will be treated as your deposit (even though no money will actually change hands)
Perfectly acceptable by several lenders

'Gifted Deposit' is when you are buying a house from an unrelated vendor and the £20k would be given as cash (and a gifted deposit letter signed for the lender) by your parents

Hello123_2

sockpuppet wrote: »

Beacause you are buying it from your parents it is treated as a 'sale under value' and the £20k will be treated as your deposit (even though no money will actually change hands)
Perfectly acceptable by several lenders

'Gifted Deposit' is when you are buying a house from an unrelated vendor and the £20k would be given as cash (and a gifted deposit letter signed for the lender) by your parents

Thank you. Don't suppose you know which lenders allow it or where i can find out?

sockpuppet

Pretty much any lender.
I cant really specify any without knowing your full circumstances, but the majority are quite happy with this

A broker can assist you or you can speak to them directly to make an application

Make sure you tell them it is a sale undervalue so any application is submitted correctly

KimJules

I think the owner has the right on how much price they want to sell the house but.. you need to someone who is a mortgage broker or a lender.. to help with this one.

tim123456789

sockpuppet wrote: »

Beacause you are buying it from your parents it is treated as a 'sale under value' and the £20k will be treated as your deposit (even though no money will actually change hands)
Perfectly acceptable by several lenders

'Gifted Deposit' is when you are buying a house from an unrelated vendor and the £20k would be given as cash (and a gifted deposit letter signed for the lender) by your parents

I only half agree

A gifted deposit is given by the vendor, money given by the parents is a gift

tim

Wywth

sockpuppet wrote: »

Beacause you are buying it from your parents it is treated as a 'sale under value' and the £20k will be treated as your deposit (even though no money will actually change hands)
Perfectly acceptable by several lenders

'Gifted Deposit' is when you are buying a house from an unrelated vendor and the £20k would be given as cash (and a gifted deposit letter signed for the lender) by your parents

sockpuppet wrote: »

Pretty much any lender.
I cant really specify any without knowing your full circumstances, but the majority are quite happy with this

A broker can assist you or you can speak to them directly to make an application

Make sure you tell them it is a sale undervalue so any application is submitted correctly

Lets be honest and say there may be a monority of lenders who would accept this, but we don't know which lender specifically will accept a gifted deposit ilo any collateral put down by the purchaser today.

Wywth

Hello123 wrote: »

Can someone help me understand if it would be possible to buy my parents house from them cheaper than market value? is this mortgagable?

It's their 2nd house - they rented it out for a while.

They want to help me on the property ladder and sell it £20k cheaper than market value. I dont have a deposit.

How on earth does this work/would lenders allow it?

Hope someone can help! Thanks!

Usually what happens is the lender uses the lower figure of either the sale value or the valuers valuation as to the the value they are prepared to lend against.

Most valuers will not value a property above the agreed sale value, especially in todays market; it's a risk for them that they don't need to take.

Afterall, a valuation is a guess and a property is only worth what someone else is willing to pay for it.