Buying Property From Grandparents

billy84

hello everybody,

very new to the forum so bare with me! seeking some advice for our next purchase but I'll start from the beginning to try and help you get the full picture.

we bought a flat in 2006 on the famous northern rock together mortgage, we still own the flat and recently moved back in after privately letting it out after 4 years, as we needed larger accommodation for our growing family we rented a 3 bed house which suited our needs. the flat is now up for sale in the region of 120-130k with a secured mortgage of 106k and unsecured together loan of 7500, once a sale goes through we will have to keep the unsecured part live and the interest rate will go up as this will be a stand alone loan, (£80 pcm) to help enable us to gather a deposit.

just before christmas my wifes Great Nanny died at the grand age of 105, her house was left in her entirety to her only surviving child (my wifes grandma) along with a plot of land next to the house which is currently having planning permission granted and being sold to a friend of mine for £80'000.

the house was originally built in 1933 by the family and had never been outside of the family and had always been habited by a member of the family, and to top it off the house had never been modernised or undergone any improvements in its lifetime.

in my wise and wonderful way i agreed to buy the house, it was valued at 170k before any modernisation approx 220 after, but was advised it wasn't a mortgageable property and required some improvements prior to any mortgages were obtained.

aware that a personal loan at this stage on paper wouldn't look good so i borrowed a £10'000 loan from my work, (£40m family run business) with no pressure on repayment dates or times and left very casual as i am a senior member of staff and can pay back as and when i like, as i feel it was important to purchase the house to keep it within my wifes family as you can imagine there is a lot of history and good memories there.

we had agreed a sale price with the grandma of £155k, so far we have re-wired, new central heating, the whole house has been plastered, new kitchen and bathroom, floors doors ovens etc etc, somehow my wife has established a close relationship with laura ashley!

i have been in contact with a mortgage advisor (friend) who has advised me Halifax have a product who will treat the equity as a gift from grandma and we will have to provide an additional 5% deposit which we have, however when i search the web i cant seem to see any products that support this information?

viewings are coming through thick and fast so hopefully an offer will be on the nearby horizon an we'll proceed.

has anyone experienced or used a product that matches this? just looking for maybe some guidance on rates etc and any other information linked to this.

i look forward to any feedback

Kind Regards

bill

kingstreet

This is not a product, as such.

There are lenders who will accept part of a reduced purchase price as the applicant's deposit where the sale is by a relative or the landlord of a sitting tenant.

It is known as a concessionary purchase. The property has to be valued at the higher amount by the lender's surveyor.

You will normally pick the lender's product which best suits your needs from those it has available at your loan to value.

Foxy-Stoat_3

A lot of words to say:

Buying a £170,000 property for £155,000.
Will have between £10,000-£20,000 cash sale from current property, so LTV will be 90-86%.
Have £7500 loan plus £10,000 casual loan.

You can remortgage after the fixed rate ends and get on a much better LTV % when accessing the full value.

Sounds like a good plan, Stan.