Are there any implications from this? Buying at less than value.

JJASMINE

For example...

House value is £XXX. Owner sells to family member for £XXX - £100K.

1. Can purchaser still get mortgage based on LTV ratio at actual value rather than their purchase price?

2. Will purchaser pay stamp duty at VALUE price or PURCHASE price?

Any guidance would be appreciated. Thanks!

cte1111

Stamp duty will be at purchase price.

Mortgages aren't really my area, I would think it would depend on the particular company you use. Valuations tend to start at the offer price then knock off money for any possible issues, but a mortgage broker could be helpful in finding a lender that will value differently.

betmunch

As you are buying from a family member there are lenders that will use the higher value when determining the LTV in the right conditions

foxy-stoat

In the wrong conditions, lenders use the purchase price. Not a big problem as you only fix for the shortest time and remortgage at the actual value when the deal ends.

chelseablue

I have sold my place to a family member.


It was valued at £250,000 and I am selling it to him for £235,000.


His lender is using the £250,000 value to work out his LTV.


The lender is Santander

JJASMINE

Thanks for the replies. Hopefully everything will be okay then!

We have a DIP from Santander and Halifax (did Halifax first as they are our current lender but then noticed santander had a slightly better rate.)

Was thinking we'd wait till we have an offer on our house before applying properly - is that the best thing to do?

OnTheRun

JJASMINE wrote: »

For example...

House value is £XXX. Owner sells to family member for £XXX - £100K.

1. Can purchaser still get mortgage based on LTV ratio at actual value rather than their purchase price?

2. Will purchaser pay stamp duty at VALUE price or PURCHASE price?

Any guidance would be appreciated. Thanks!

It depends on what XXX is, but most valuers won't put their neck on the line if they don't need to.

i.e. if XXX is £10mil, then the valuer will value the property at £9.9mil instead ... and that will be the value used in the LTV

Obviously if XXX is only £110k then the valuer will value the property at more than £10k, and you'd need to carefully choose the lender who will work with you.

Stamp duty will be based on the purchase price (assuming nothing dodgy going on behind the scenes to disguise the real purchase price - e.g. the buyer also paying the seller another £100k for "carpets & curtains" etc)