Need advice about a mortgage issue please

ItsyBitsySpider

Hi All,

Recently our offer was accepted on a property and the vendor agreed to pay the stamp duty. The mortgage advisor at London and Country, went ahead with the application as he was confident this incentive won't cause a problem in getting the mortgage approved. However, he informed me today Abbey won't be lending in case the stamp duty is being paid by the vendor. He further added no other vendor would lend in this situation, I am not sure how accurate it is though.

Now, I have the following options I guess:

1. Try some other lender which could lend in this situation.
2. Get a personal loan for the amount of stamp duty which is around £8000.
3. Drop the deal.

Are there any lenders/mortgage brokers who would deal with this. If not, is it usually possible to get a personal loan for paying the stamp duty. I have never taken any loan in my life so really clueless about this.

Our income is going to increase in the next few months so paying off the personal loan would not a be an issue if it is possible to get the personal loan.

I would highly appreciate any help.

Cornucopia

Can you renegotiate the stamp duty as a simple discount off the purchase price?

Thrugelmir

The issue relates to the value of the property. What's the purchase price?

amnblog

Abbey criteria is to accept a 5% deposit contribution and legal fees and stamp paid by the builder on a new build.

I assume from what you are saying that your vendor is not a builder/developer, and this is not a new build.

amnblog

Abbey say

We will not accept a gifted deposit if:

• provided by the vendor (unless an acceptable new build incentive from the builder/developer);

amnblog

Further thoughts Spider.

If the vendor is a parent or guardian you can get the case placed elsewhere.

You can borrow the money elsewhere for the Stamp Duty but....

caution here

it needs NOT to upset the Abbey affordability calculations (check with your broker)

it may tip your credit score off of pass status to a fail

ItsyBitsySpider

Thanks for your replies everyone. Sorry for not providing the full information. The house price is £278,000 and it is not a new build. I guess it is not possible for the vendor to bring the price below the stamp duty.

amnblog wrote: »

Further thoughts Spider.

If the vendor is a parent or guardian you can get the case placed elsewhere.

You can borrow the money elsewhere for the Stamp Duty but....

caution here

it needs NOT to upset the Abbey affordability calculations (check with your broker)

it may tip your credit score off of pass status to a fail

What do you mean the vendor being a parent or a guardian amnblog. I am conscious about the affordability calculations too but it will be a choice failing without trying and failing after doing my best I guess if it comes down to applying for the personal loan. Do the banks offer personal loan for this purpose ?

Thrugelmir

ItsyBitsySpider wrote: »

The house price is £278,000 and it is not a new build. I guess it is not possible for the vendor to bring the price below the stamp duty.

At £269,500 the house is very close to the change in stamp duty threshold.

Cornucopia

I get the impression that the Stamp Duty payment is not being presented like that (as a discount against the selling price). If it was, it would not fall foul of the lender's rules.

One of the professionals (broker or estate agent) should have sorted this out properly.

kingstreet

Since July 2011 when Halifax left the market, the "vendor gifted deposit" became a thing of the past, unless you were buying a newbuild.

Now, any "incentive" provided by a vendor to encourage you to purchase their property is accompanied by an equivalent reduction in the value of the property.

If you buy for £267k and the vendor pays your stamp duty, the surveyor will be instructed by the lender to value the property at £259k instead and you'll still have to find the £8k as the lender bases the mortgage on purchase price or value, whichever is the lower.

amnblog

[QUOTE=ItsyBitsySpider;63093988Do_the_banks_offer_personal_loan_for_this_purpose_?[/QUOTE]

We have had a couple of clients get loans from the major supermarkets in this kind of scenario.