Buying House from a Parent Without a Mortgage?

Gareth1989

Hi all,

My Dad is in the process of buying a new house. He is going to have a small Mortgage of circa £50k as he is putting a considerable cash amount down as a deposit. The new mortgage is not dependant on him selling his existing home in any way.

I would like to buy his existing home (where I also currently live). He would give it to me at a 10% discount to market value as his way of helping me on the ladder. In essence, providing me with a deposit via a discount.

We have spoken and wonder if there is any way for me to purchase the house from him without the use of a mortgage. We have worked through the figures and the bank will earn around £60,000 in interest over the term of the mortgage, interest rate dependant of course.

Our thoughts were that we open an account which I pay into monthly with no access for myself to withdraw (but my Dad can withdraw as and when needed). Once I have paid in the full amount agreed I can purchase the house for, it is mine. No need to pay interest as such.


Initial questions are:

1. Is this possible?
2. What is the best method of achieving this process?

Appreciate any feedback or advice.

Thanks,
Gareth

somethingcorporate

You effectively rent it until you have paid enough to buy it outright?

I would suggest seeking paid for legal advice but doesn't seem like an unreasonable/unresolvable situation.

termhero

Perfectly feasible, as long as your Dad is happy to wait for his money (which he appears to be).


As said above, buy yourself half an hour with a solicitor to find out how to draw up the contract.

getmore4less

He just gives you a loan(house) and you pay it back.
(you don't rent it that has other complications you don't want)

Just be carefull on any artificial "interest" that would be taxable.

there are some things to consider like deaths and the can't pay/won't pay in the loan agreements.