Anyone bought a house without deposit?

lil_Amz99

We told our landlord in conversation that we are looking to stay in our rented house until we buy a house of our own.

He instantly offered us to buy our current home from him but not pay a deposit for 4/5 years...!!

He said this is a legit way lots of people buy the houses they already rent but I have never heard of it! Step-mum is a financial advisor and has never heard of it either!

Not sure I want to buy this house as it needs a lot of work doing but it would certainly get us on the ladder a lot quicker.

Has anyone ever heard of this before and have any more information?

TIA:)

anselld

Sounds like he is suggesting a "Lease Option" contract.

It is legit, but not necessarily the best way to buy a house.

lil_Amz99

Ok thanks I will google that terminology and see what I can find out.

Out of interest, why do you say not a good way to buy a house? I am wanting to find out as much as I can all pro's and con's and opinions

Bart1

I bought a flat without a deposit.......... In 1987

eddddy

lil_Amz99 wrote: »

Out of interest, why do you say not a good way to buy a house? I am wanting to find out as much as I can all pro's and con's and opinions

The biggest problem is that it presents lots of ways for an unscrupulous LL/Seller to rip-off an unsuspecting tenant/buyer.

Before entering into an agreement like this, you should do everything that you would do if you were buying the house normally. That includes:

- A valuation (as though it was a mortgage valuation)
- Surveys
- Instruct a solicitor to do searches, check the title etc

(Otherwise the you might be entering into an agreement to rent/buy an unmortgageable heap of ****.)

Then ask a solicitor to advise you on the agreement itself.

Make sure you think through all eventualities, and understand the impact they would have. For example...

- If you miss one or more payments (perhaps because you lose your job)
- If you decide you need to move somewhere else
- If property prices tumble after you sign the agreement, but before you have a mortgage
- If the property is re-possessed by the LL's mortgage lender

To be honest, it's a bit of a minefield.

lil_Amz99

Thanks eddddy.

LL suggested having 3 valuations and settlng a price of whatever the average Is so I think I might start there.

I am really struggling to decide what to do for the best as this house would be cheap (old terrace) but would get us on the ladder and hopefully wouldn't have a huge mortgage on it. Or buying a beautiful new build we have seen for the very very top of our budget and using gov help to buy scheme.

Hubby also suggested buying a self build today but thats going to need a lot of research before I can even consider it lol.

fairy_lights

But even if your landlord doesn't want a deposit, surely you would need one to be able to get a mortgage?

lil_Amz99

fairy_lights wrote: »

But even if your landlord doesn't want a deposit, surely you would need one to be able to get a mortgage?

Yes we would but we wouldnt have to take out our own mortgage for a few years as I understand it as we would take over payments of the owners mortgage then pay deposit when we take our own mortgage out