Buying from a family member

marksoton

IainBeale wrote: »

OK now I'm even more confused.

I think I was under the idea a mortgage had to be in place before my current home was sold. So I know once we have a sale we are free to move in.

No gift was intended or needed. If the property went on the market. He would accept that amount from Joe Bloggs . He's prepared to accept 25K under market value!?

I don't need to sell our house before we do any renovation as I have the money for required work. This would be paid back once we complete. Paid back to whom!?

There is no danger of this house sale falling through we want the same outcome. There is no chain etc.. mortgage is fully paid off.
What mortgage?
I'm confused by AnotherJo sorry. I'm not trying to add value to the property just make it livable before I move my family in. Won't the mortgage just be on the house in its current condition? I wouldn't think about informing my current mortgage provider if I wanted to put a new kitchen in my home so why would this be an issue with my next home


Thank again for your speedy advice

This is all very confusing!

davidmcn

theartfullodger wrote: »

The authorities (HMRC, Benefits etc etc...) are entitled to assess the transaction at genuine market value:...So if, for example, stamp duty is due that may be charged at market

Stamp duty is not charged at market value, it's charged on the consideration for the transaction. If it's a gift, or a bargain price, that's what the duty is based on.

theartfullodger

Not always & I'm fairly certain HMRC have wide powers, particularly with "connected persons" transactions...

for example with connected companies..
http://www.legislation.gov.uk/ukpga/2003/14/section/53

the chargeable consideration for the transaction shall be taken to be not less than the market value of the subject matter of the transaction as at the effective date of the transaction.

davidmcn

theartfullodger wrote: »

Not always & I'm fairly certain HMRC have wide powers, particularly with "connected persons" transactions...

for example with connected companies..
http://www.legislation.gov.uk/ukpga/2003/14/section/53

I'm not aware of any similar deeming provisions for individuals.

AnotherJoe

I'm confused by AnotherJo sorry. I'm not trying to add value to the property just make it livable before I move my family in. Won't the mortgage just be on the house in its current condition? I wouldn't think about informing my current mortgage provider if I wanted to put a new kitchen in my home so why would this be an issue with my next home
======

I said that because you stated that "I understand a valuation is needed for a mortgage but I've been told this would have to be after we have done any work" which lead me to believe you wanted to get a mortgage based on a better LTVbased on the property being in its "final" state rather than needing a granny flat knocking through etc. Now you are saying all it needs is a new kitchen??

Are you proposing to do a lot of work (and spend a lot of money) on a place and then buy it? That would be, even if it was your mums place and you are the apple of her eye, mad.

is this the situation ...

You wish to get a mortgage on another house once you've done work on it, which wont be for, say 6 months timebut you want the mortgage co to give you a mortgage agreement right now ? usually such agreements are for 6 months. And you'd be buying it as second house, since you aren't planning to sell yours yet ?

IainBeale

Yes that offer would be acceptable for example next door was sold last year for 102k and is slightly bigger and in better condition. I do think our estate agent value is slightly inflated tho. The property would likely be sold through an auction where there is no guarentees.

There is no money owed on the property we wish to purchase, and the owner is happy with 95k

A kind parent has offered to put up some money towards our renovation costs.

I think the offer is there or there about s with market value. Also I would also pay more ie. 100k if it meant a smoother transition . do you think an increased offer would helo?

IainBeale

Thanks anotherjoe that makes sense. Are deals in principle available. Would they likely cost more? Would.it effect my credit score negatively?

OK the main work would be a new kitchen and changinging a "bed sit" into a play room for the kids. ( but really that's just removing a small kitchen, a locking door and bed to be honest not major construction ) . also adding some pattio doors to the rear.

I just thought it would be easier doing it now to get it ready to move straight into. I obviously don't mind working on a house we will be moving in the future.

AnotherJoe

So the situation is, you do wish to purchase it now, before the work is done? That's not been clear so far. You also gave the impression the sale was "a done deal" now you are taking about upping your offer?

So you will have two mortgages for a while. The mortgage co will want to know how you can afford to repay two mortgages.
Your intent I see is to sell in 6 months or so thereby reducing to one but they wont see it that way they will be concerned with the here and now
Can you afford to pay two mortgages even if only temporarily?? If so, no issues apply for a mortgage to buy it.
There will also be, unless you can buy by end of March, another £3,000 tax to pay on it. Which you can reclaim as long as you sell your main house within 18 months.

ps just seen your reply but I think this still stands.

IainBeale

I guess I'm not coming across too clear on here. Thanks for all of your advice I think I would be best speaking to a fincial advisor face to face. Rather than be out of poket if things fall through/go wrong.

I have also planned to meet my current mortgage provider now I know the obsticle we need to gwt around.

I certainly don't want to end up with two mortgages to pay!

AdrianC

IainBeale wrote: »

I certainly don't want to end up with two mortgages to pay!

But you'll either own two houses, or you'll be doing somebody else's house up for them.

There is no other option.

You buy the place you're doing up first, you own it, but you need to pay for it when you buy it.
You don't buy the place you're doing up first, you don't own it and are doing somebody else's house up for them.