Tenant getting a mortgage - dodgey??

Annie1960

Are you sure the FA is genuine?

I doubt whether your solicitor would let you proceed on this basis.

As others have said, I think you should put it on the market and find a buyer who can afford it.

Pimpslider

Yeah, I'm pretty sure Annie. I've Googled them and the company name. Does say it was dissolved in 2008....which is a worry, but I spoke to her today and the company name was mentioned. But it's the process that is at question, not so much the company. But I agree that any half decent Solicitor would probably just ask !!!!!! I thought I was doing!

Richard_Webster

Financial adviser needs to be reported and both he and the buyer would be guilty of mortgage fraud. Does the buyer fancy a term in prison?

Annisele

Pimpslider wrote: »

Yeah, I'm pretty sure Annie. I've Googled them and the company name. Does say it was dissolved in 2008....which is a worry, but I spoke to her today and the company name was mentioned. But it's the process that is at question, not so much the company. But I agree that any half decent Solicitor would probably just ask !!!!!! I thought I was doing!

In that case, it's quite possible the "adviser" is not authorised to give mortgage advice. Have a look for the firm and the adviser on the FCA register.

You should report them to the FCA in either case. Either you've got some idiot acting without authorisation, or you've got a different kind of idiot risking their genuine authorisation to advise their clients to commit fraud. Or possibly somebody fraudulently pretending to be someone else. There may be other scenarios, but all of them are dodgy and you do not want to be involved.

Pimpslider

Thanks people. Massive appreciation to you all.

I'm going to contact the FA today and say I am not happy to proceed in this way. However, if she is a real/legal company then I will offer her the house for the asking price of £250,000 then she can sell it to the tenants if the process is apparently acceptable. That way it's down to them, not me, and I get my asking price.

kingstreet

It is possible for a landlord to sell a property to their tenant on a "concessionary purchase" basis, where the landlord gives a discount on the price.

The discount becomes the tenant's deposit, or part of it.

I don't really understand about this £50k changing hands with a third party involved, as that really isn't necessary.

For example;-

£300,000 property value (must "value-up" when inspection done)
£50,000 discount

£250,000 net purchase price and mortgage amount.

Stamp duty is based on the £250,000 consideration, but CGT would be based on market value, £300,000, so little for the landlord in this.

Lender happy and no cash changing hands. Don't know if the broker has made a mess of explaining, it's a scam or lack of understanding on tenant's part.

Pimpslider

That sounds feasible King.

But the FA stated that the Completion Statement from my Solicitor will have:
Sale Price: £300k
Disbursements(deductions): Solicitor Costs and the £50k back.
Net Amount: £250k(ish)

Does this sound right? Is this where the/a discount would come into play or would it have been included before hand?

warehouse

OK, so 55 people have voted, not a single one think it's a good idea, yet you're still giving the impression you might go along with this lunatic idea?

Please wake up and smell the coffee Pimpslider.

dominoman

Pimpslider wrote: »

Thanks people. Massive appreciation to you all.

I'm going to contact the FA today and say I am not happy to proceed in this way. However, if she is a real/legal company then I will offer her the house for the asking price of £250,000 then she can sell it to the tenants if the process is apparently acceptable. That way it's down to them, not me, and I get my asking price.

Have you had it valued by local estate agents?

If they say you can get more than 250k for it then serve notice on the tenants and market it on the open market.

Don't try and guess what it is worth. You might be surprised by how much prices have changed in the last few months.

kingstreet

Pimpslider wrote: »

But the FA stated that the Completion Statement from my Solicitor will have:
Sale Price: £300k
Disbursements(deductions): Solicitor Costs and the £50k back.
Net Amount: £250k(ish)

Does this sound right? Is this where the/a discount would come into play or would it have been included before hand?

No. That's why I queried it.

The £50k is just a notional figure which does not change hands.