Solicitors confused over purchase price

TB1987

I'm sorry but I have to disagree.

I cannot believe a experienced mortgage broker with over 30 years experience, the Halifax and my parents solicitors have gotten confused over this. If I was not explaning it right in the first place to our broker - how has it got through a broker, the credit checks and underwriter process with Halifax and then my parents solicitors?

We are not having a 100% mortgage, I am fully aware these do not exist. If we didn't have proof of a deposit (which again, is in the forum of equity) how would Halifax gone as far as to provide us with a mortgage offer? The house has been valued at £130,000 and my parents are selling it to us for £103,000 - no further deposit is needed because the equity is there. If we didn't pay our mortgage, the Halifax know they would get their money back from the sale of the house because it is valued at £130,000. I don't know where I haven't explained this before - I haven't tried to hide anything from this thread?

I will just delete my posts and ask for the thread to be locked, there is no point asking for re-assurance and help on here if people are not going to read the original post properly.

nidO

Everyone responding has read your initial post properly.

The house being valued at £130,000 is *irrelevant*. As said, mortgage providers offer based on the lower of the valuation and sale price.

Therefore, to most bluntly answer your original post's question, if you want a £103,000 mortgage and are expecting this to be around 79% LTV, the price on your sale contract should be £130,000, and your solicitor is therefore right.
That's the question you asked, it's been answered.

kingstreet

I think the purchaser's solicitor is trying to treat this like a vendor gifted deposit "£130,000 with £27,000 gifted deposit leaving £103,000 to pay," but a concessionary purchase doesn't work like that.

The lender is happy the property is worth £130,000 and is happy for the purchaser to buy it for £103,000 with a £103,000 mortgage. The lender is happy to treat the gifted equity as a deposit and treat it as a 79% mortgage, not 100%.

The fact the lender is willing to do this does not impact on the solicitor. The contract price is £103,000.

The purchaser's solicitor should seek clarification from its client, in this case the lender, not the purchaser.

TB1987

kingstreet wrote: »

I think the purchaser's solicitor is trying to treat this like a vendor gifted deposit "£130,000 with £27,000 gifted deposit leaving £103,000 to pay," but a concessionary purchase doesn't work like that.

The lender is happy the property is worth £130,000 and is happy for the purchaser to buy it for £103,000 with a £103,000 mortgage. The lender is happy to treat the gifted equity as a deposit and treat it as a 79% mortgage, not 100%.

The fact the lender is willing to do this does not impact on the solicitor. The contract price is £103,000.

The purchaser's solicitor should seek clarification from its client, in this case the lender, not the purchaser.

Thank you so much - this has explained it much so better then I ever could. I was getting ready to call my broker in tears thinking I had done something wrong.

I was forgetting the concessionary purchase explanation - I just checked Halifax intermediaries lending criteria and saw that a gift of equity is allowed as I knew it couldn't have got this far without being stopped somewhere if something was wrong.

Thanks so much again! I knew I shouldn't have applied for a mortgage at the same time as planning a wedding!

kingstreet

As long as the broker calls the service team and confirms it's a concessionary purchase when the application is submitted, they can do the necessary manual workaround so the paperwork is issued correctly.