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Advice re house purchase from partner's family
DebtClearer
Posts: 281 Forumite
Hi guys, I am after some advice from people with knowledge as this would be my first house purchase.
The current situation is that I live in a rented flat with my friend whilst my gf lives with her sister and pays her rent. The house my gf lives in is owned by her sister and her sister's bf who works away all week.
Me and my gf don't have much money (ignore my signature as I am now nearly debt free) however we only have a few grand saved up between us.
Gf's sister is on about moving away to live up north with her bf who owns another property. They are suggesting that they could sell their house to me and my gf.
The house a few doors away recently went on market for £157k and sold instantly (unsure of actual selling price).Gf's sister had her house valued and it came back as £150k (though it is in a worse state than their neighbours house that has a blocked drive, rear extension etc).
On this basis they are proposing they could gift us a 5% desposit of £7.5k if we then agree to buy the house for £150k. We have been told we would likely get a mortgage for the remainder £142.5k as we earn a combined £50k per year in stable jobs.
This would mean that gf's sister and her bf would not have to pay solicitor fees. The house changed hands within the family before and I'm told no solicitor was used.
My queries
-I'm not entirely sure the house is worth £150k. As discussed the house that sold near it is far better and I doubt went for the full asking price of £157k (most don't). Would this matter? I have simply been looking at it in the sense that as the £7.5k is gifted as long as the value stays at £142.5k we would be OK to proceed?
-Would a survey need to be completed before any mortgage was approved even though itn is being sold between family?
-Does this sound like a good deal? I believe it could benefit both parties as if she moves out gf's sister will want to keep returning to area and will want to stay at the house which isn't an issue.
The current situation is that I live in a rented flat with my friend whilst my gf lives with her sister and pays her rent. The house my gf lives in is owned by her sister and her sister's bf who works away all week.
Me and my gf don't have much money (ignore my signature as I am now nearly debt free) however we only have a few grand saved up between us.
Gf's sister is on about moving away to live up north with her bf who owns another property. They are suggesting that they could sell their house to me and my gf.
The house a few doors away recently went on market for £157k and sold instantly (unsure of actual selling price).Gf's sister had her house valued and it came back as £150k (though it is in a worse state than their neighbours house that has a blocked drive, rear extension etc).
On this basis they are proposing they could gift us a 5% desposit of £7.5k if we then agree to buy the house for £150k. We have been told we would likely get a mortgage for the remainder £142.5k as we earn a combined £50k per year in stable jobs.
This would mean that gf's sister and her bf would not have to pay solicitor fees. The house changed hands within the family before and I'm told no solicitor was used.
My queries
-I'm not entirely sure the house is worth £150k. As discussed the house that sold near it is far better and I doubt went for the full asking price of £157k (most don't). Would this matter? I have simply been looking at it in the sense that as the £7.5k is gifted as long as the value stays at £142.5k we would be OK to proceed?
-Would a survey need to be completed before any mortgage was approved even though itn is being sold between family?
-Does this sound like a good deal? I believe it could benefit both parties as if she moves out gf's sister will want to keep returning to area and will want to stay at the house which isn't an issue.
Debtfree!
0
Comments
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My personal opinion... It's a mess just waiting to happen...0
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I agree. If you can get the funds together why not just buy another house in the area. One in better condition perhaps? At least investigate your other options with an independent mortgage advisor. All this talk of avoiding solicitors, gifting money etc all sounds like a nightmare waiting to happen.
Put it this way... Think carefully - What is the actual benefit to YOU to buying this house as opposed to any other?0 -
I agree. If you can get the funds together why not just buy another house in the area. One in better condition perhaps? At least investigate your other options with an independent mortgage advisor. All this talk of avoiding solicitors, gifting money etc all sounds like a nightmare waiting to happen.
Put it this way... Think carefully - What is the actual benefit to YOU to buying this house as opposed to any other?
The benefit is that it will remain a furnished house with gf's sister's stuff which means we would not have to buy beds/sofas/cutlery etc
Also whilst are our finances are not awful we currently have no real deposit and this would be very difficult to save for in our current circumstances. Buying this house gives us a deposit of £7.5k.
In theory my gf could move home but she doesn't want to for family reasons. If we don't buy the house then she will be forced to as gf's sister will sell on open market which could have a very bad impact on our relationship.
I understand the idea of a gifted deposit is worrying people. What issues do you forsee in this? It is actually a not too uncommon thing these days. It would be given as when gf's sister bought the house she got a great deal off another relative so it would be passing the benefit on or so to speak..Debtfree!0 -
Oh and when I say the house nearby is in better condition to clarify the whole house under consideration of buying was gutted and put back together 3 years ago. I just mean that from the outside it is not as aesthetically pleasing and its garden/drive area needs landscaping.Debtfree!0
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But usually with a gifted deposit the gifters have no interest or connection to the property which isn't going to be the case here.
You say she 'could be forced to' - is she more concerned about your relationship or the house?
Have you looked into Help to Buy at all? Or looked at a bank mortgage calculator with your deposit and income?0 -
Your mortgage provider would usually insist on a basic survey at least to ensure the house value is more than the amount borrowed just in case you defaulted with your repayments. A solicitor would need to be appointed still to do local searches, change the deeds, etc.0
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But usually with a gifted deposit the gifters have no interest or connection to the property which isn't going to be the case here.
You say she 'could be forced to' - is she more concerned about your relationship or the house?
Have you looked into Help to Buy at all? Or looked at a bank mortgage calculator with your deposit and income?
Hi,
I just meant that if they sell the house elsewhere she would have to move home (which isn't ideal due to family reasons) as renting elsewhere would be even more of a finncial burden.
We don't really have a deposit just about £2k between us really in help to buy ISAs.
Is this really such a bad idea? Seems as though everyone is against it.Debtfree!0 -
Your mortgage provider would usually insist on a basic survey at least to ensure the house value is more than the amount borrowed just in case you defaulted with your repayments. A solicitor would need to be appointed still to do local searches, change the deeds, etc.
Who normally pays for that? The buyer or seller? What would fees be?Debtfree!0 -
Read all of this first: http://www.moneysavingexpert.com/mortgages/house-buying-guide
Sometimes the basic survey is included in the mortgage fee (it can be 'free' if you have a no-fees mortgage).
You would still have to instruct a solicitor if buying with a mortgage which can be at least £1000 including searches.
You'd also have to pay Stamp Duty.0 -
DebtClearer wrote: »Who normally pays for that? The buyer or seller? What would fees be?
You. Honestly, you need to take all things into consideration.0
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