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Deposit gained from equity in house we could be buying
glentoran99
Posts: 5,825 Forumite
Ok this is a wee bit complicated and only a possibilty.
Grandfathers house could be going up for sale and we would be interested in buying, The proceeds would be split between my mum and her brother.
Now my mum has said that she will be giving us some of this which would be enough for a deposit on a house, however we would like to be the ones buying the house rather than getting the money and then buying a different house.
Has anyone any idea how this could be arranged practically as the situation is we wouldnt have the deposit on the house until after the house is sold.
Grandfathers house could be going up for sale and we would be interested in buying, The proceeds would be split between my mum and her brother.
Now my mum has said that she will be giving us some of this which would be enough for a deposit on a house, however we would like to be the ones buying the house rather than getting the money and then buying a different house.
Has anyone any idea how this could be arranged practically as the situation is we wouldnt have the deposit on the house until after the house is sold.
0
Comments
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from a conveyancing point of view there is no legal requirement to have a deposit, if the sellers are happy not to have one.
It sounds as though in effect your mum is willing to sell the house to you at an undervalue -
e.g. house is worth £200K, you buy for £190K, your mum gets £90K, your uncle gets £100K.
I am not sure how this would work in terms of you getting a mortgage, as normally they will only lend on the basis of the lower of the sale price or the valuation - I think you will need to speak to your conveyancing solicitor - it is probably do-able but there may well be extra paperwork to make it work. In effect you will have a gifted deposit.All posts are my personal opinion, not formal advice Always get proper, professional advice (particularly about anything legal!)0 -
If you are buying at undervalue from a relative, it's a concessionary purchase.
Most lenders won't do this, so speak to an independent broker who will "beauty contest" the products of those who do for you.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
from a conveyancing point of view there is no legal requirement to have a deposit, if the sellers are happy not to have one.
It sounds as though in effect your mum is willing to sell the house to you at an undervalue -
e.g. house is worth £200K, you buy for £190K, your mum gets £90K, your uncle gets £100K.
I am not sure how this would work in terms of you getting a mortgage, as normally they will only lend on the basis of the lower of the sale price or the valuation - I think you will need to speak to your conveyancing solicitor - it is probably do-able but there may well be extra paperwork to make it work. In effect you will have a gifted deposit.
yeah its the mortgage part would be the issue, Thinking maybe a short term loan but then have the issue of what would be effectively borrowing for the deposit, even though it would be paid back in a short time0
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