Buying my parents home

Dougaloug

Hi,
My parents are downsizing and the plan has always been for them to use some of the money they make from selling there home as a deposit towards my first house. The thing is I am really keen to buy the house my parents are moving out of. It's in my price range and has lots of sentimental value.
The problem is they need to sell that house to give me the contribution towards my deposit. Is it possible to do this with me buying the house?


Any help with this would be greatly appreciated.

AdrianC

So long as the total deal size is "about right", I can't see that there'd be any problem with the deposit being only notionally handed over. (Think in terms of your parents handing you a Monopoly £20,000 note as a gift, which you then had over to them towards the house price.)

If there's a big discount off the open market price, then there's various potential impacts which I'm sure people will be accusing you of before long... <grin>

Dougaloug

Thanks for the help. They had it valued at £90,000 with a view to selling me it for £85000. They bought it for £16,000 so are happy to drop the £5000. Do you think this is too much?

searchlight123

sounds more than reasonable.
i do not think up to 10% off is unusual under any circumstances and is vindicated by them not having agents fees to pay etc.

Annisele

Was the £90k valuation from an estate agent or a surveyor?

If it's from an estate agent, then it's *possible* that a surveyor would only value it at £85k - and if that happened, you wouldn't be able to get an £85k mortgage on it.

Jelly_Tots

You would be able to purchase their house in this situation quite easily. They can give you what's called a 'gifted deposit'. This technically means the deposit you are using to purchase a property has been gifted to you, and you have not accrued it yourself, ie. you haven't saved it up in a savings account over a period of time. You would have to declare this to your lender, however they usually have no problems with this provided you meet the mortgage affordability criteria.


When you purchase the property from your parents, you would give them the difference between the deposit they were going to give you, and the agreed purchase price.

Dougaloug

Got an appointment set up with a mortgage advisor tomorrow night so fingers crossed we get it all sorted. I got a mortage in priniciple agreement a few months ago that lapsed when I didn't find anywhere I liked. Hopefully it will all work out.
Thanks again for all the help!

booksurr

the phrase used is vendor gifted deposit

there are lenders who accept them but there are others who won't. You will be able to find a mortgage but your choice is slightly restricted. Some lenders may still require you to have a cash deposit of your own on top of the gift therefore further limiting your choice of lenders.

but all perfectly possible nonetheless