First Time Buyer after renting for 6 years where to start!

milliemoo7

Ok so me and my partner need to get things moved quite quickly! we have received martins mortgage guide but would still like a bit of help if poss!
We have been living in our current rented property for the last six years and our landlord has decided he now wants to sell. It is the ideal home for us so we have decided we would like to buy it before it goes on market! I can not get involved with the mortgage as I went bankrupt coming up to 5 years ago so my partner is going to do it on his name. Due to renting we have not been able to save a penny for the mortgage but I know my dad would lend me about £5,000. The house is going for £167,000 and we have checked on my partners wages he should be able to have it. Now he has checked his score with experian today and it is 850 he had one bad debt leave the report this week so his file is now clear. He seen mortgage advice on experian and was going to contact them but I wanted to find out any advice on where we should go from you guys??? He did see a broker about two months ago which advised him to wait until this one debt had gone (which we have done) and also mentioned something about the deposit would not have to be the full amount because we have been renting???? My partner wanted to go with Natwest as he has banked with them all his life but I have heard not so good storys and he doesnt want to damage his credit file by applying and getting refused!
Thanks in advance

Contemptuous

Is the property being sold to you at a discounted price?

Red-Squirrel_2

I'm not sure that you have enough in cash to be honest, if the money from your dad is your only funds.

Your deposit would need to be at least 5% of the sale price at an absolute minimum (so £8350) and then there are all the fees on top which can come to a couple of thousand or more easily.

I'm not sure what the broker meant about not needing the full deposit. A mortgage lender will only give you an absolute maximum of 95% of the property value (and that's really optimistic, and might mean you need to use a Help to Buy scheme) so the other 5% has to come from you or as a gift from your seller. Do you think your landlord would give you a 'discount'?

milliemoo7

Yes our landlord is giving it at about £10,000 cheaper than the asking price. would we be able to get this included in the deposit then?

audigex

I'd say it's possible to get a discount from the landlord:

1) You can pay him rent up until the day the exchange goes ahead, so he never loses out on rental income. He doesn't have to end your tenancy early in order to have the property empty to sell, nor does he have to wait until you've left to complete (assuming he could arrange a sale before your tenancy would end anyway). This could potentially be worth a month's rent or more.

2) You're an easy sale: you're already there asking him if you can buy it: you save him time, effort and money. Selling a house is a hassle, this will make his life much easier. You're also taking it at asking price, when he would be risking getting no interest and having to reduce the price later

3) Going back to money: he'll potentially save up to 2% of the sale price on estate agents fees! (typically 1.5-1.8% + VAT) That's 3,340


Edit: Didn't see your reply until I posted my own

That 10k does make a difference, as it basically counts as your deposit (a deposit isn't REALLY a deposit, it's really the difference between loan and property value). The mortgage company is interested in whether, if house prices go down, they lose money. The more equity you have in the property, the less risk they're taking and the happier they are.

That 10k discount on top of your 5k cash gives you 15k equity in a 177k house, so roughly 8.5%, which should be sufficient for a 92.5% mortgage... assuming that 177k is a fair market valuation, which the mortgage company agrees with.