Tenant getting a mortgage - dodgey??

Leon_W

I think things may have been explained to you in a confusing manner.


Kingstreet is right. It is perfectly possible for you to sell your property to your tenants at a discounted price. The discount given forms the tenants deposit.


So, in your case, property is valued at £300,000 (I'll come back to that) and you give the tenants 20% discount. They raise a mortgage at 80% LTV and you receive the £240k or whatever it is. Like kings, I don't see where this £50k "back" comes from. There is no £50k, it's equity.


Usually discounts are in the region of 10 - 15 % , they must be genuine ! BUT who is to say that your property WONT value at £300k ? All down to the valuer I'm afraid. Lenders ARE prepared to lend in these scenarios but I think they are ( quite rightly) subject to more scrutiny.


Ask the FA's a few more questions, I get the feeling they've explained things badly.

DaftyDuck

Of course, if a (reputable) valuer were to value it at 300k, that's what it would/should be worth to you on sale.

I haven't even bothered to add my vote... I think you can guess what it'd be....

Pimpslider

Thanks people. Some interesting and helpful comments here.:T

I did have it independently valued and the £250k was a mid to top value.

The part that confuses me is that the FA is saying I have to sign something prior to anything going ahead saying I pay them £50k on completion. So the tenant's Solicitor is passing over the full £300k, then my Solicitor has to bounce back £50k, like its a bill I have to pay (such as imaginary renovations to the property during their time there). She (the FA) definitely said I had to sign something with them.

MartynK

Personally re-reading this I'd just evict and advertise it at 265k as per G_M's comments.

I can't imagine the tenants solicitor going ahead with what the FA is advising, and if they do then what does that say as well.

Maybe you'll be able to sell at 250k to your tenant and the FA will back off after you tell them its 250k or nothing, or maybe this will be the first of non stop hassle and dodgy deals they will try on....
If they can't afford the mortgage gotten properly then you may well find any lender may see through this and you'll of wasted a month or 2 that it could of been in the open market

Leon_W

I think in this case you will be better off just stating how much you actually want for the property and letting them all get on with it.


You don't want to be doing anything that could come back and bite you on the bum later. I'm not saying the deal IS dodgy as, has been explained, it's perfectly possible but it COULD be dodgy. Perhaps get your solicitor to check any paperwork and ensure 100% that what you're doing is above board.

Pimpslider

I'm gonna blow it out. I have to. It's obviously easier to sell to the current tenants, but not if something smells like kippers!

Basically I think it is odd that I am being asked to sign something else prior to any sale. Why should I? Surely all my signing is done with my Solicitor.

I'll re-post once I've chatted to her (tenants FA).

Thanks Peeps...!

Matt_ftb

Forget about their advisors, if your solicitor is prepared to act on this (in the way you describe) you need to find a new one.

The only thing you stand to 'gain' is selling your property at the standard marker value. Plus if the mortgage company value it at £300K then you should attempt to sell it at this.

Pimpslider

Thanks Matt but I haven't directed a Solicitor yet anyway.

ladyabouttown

So they pay £250,000, but for anyone looking at the history of the property they will see it sold for £300,000... They could sell it in a years time and ask for £300,000+ and potential buyers will think it's a bargain as the price hasn't risen in a year.

LittleMissGiggles123

I'm another No. Just sounds dodgy & I wouldn't feel comfortable getting involved in it.