Buying from family

Eniv

Hi all,

I'm looking to get a mortgage for a house my parents own, they will be selling it to me at a discounted price, (90k instead of 125k) I'm a first time buyer.

I had a conversation on the phone with my bank in regards to applying for a mortgage and the amount I was advised I could borrow isn't enough due to a combination of my income & expenditure. One advisor mentioned that as I am buying it discounted a deposit may not be required but another person I spoke to advised that's not the case.

The deposit I currently have would be enough to settle my financial commitments and my expenditure would be 0. I would then be allowed to get a larger mortgage, however I would have no deposit.

Is there a certain type of mortgage that would best suit my circumstances, or can anyone clear up my confusion?

Sorry if this has been posted before or i'm doing anything wrong on these forums, i'm new

Thanks in advance,

Louis

AnotherJoe

There are some lenders who will consider the difference between value and cost as your deposit. It sounds as if the first adviser was working for that type of lender.

It also sounds as if you are in the position where you are fooling yourself you have savings when you don't. For example,you have £30k in savings and you have loans totalling £30k. So really you have no savings. Plus you have all those high interest rate loans to pay off. Plus you have large monthly commitments that don't look good when applying for a mortage.

You haven't given the numbers so it's hard to be sure but it seems from the little info you've posted that you'd be better off paying off your loans (which will save a lot of money due to high interest rates) and then use the gifted deposit from parents as your deposit with the lender that allows that. And then you won't have the monthly outgoings from your loans and can use that to pay the mortage (which will be at a much lower interest rate than those loans).

csgohan4

Pay your loans off first, your deposit/savings are losing you money as your loans have higher interest.


You can't buy a house when your not ready

amnblog

We handle this situation regularly.

You can buy from your Parents with the difference between market value and your purchase price acting as the deposit.

If you have adverse credit you may also need to put some cash in yourself.

If your parents intend to stay in the property with you that is an additional complication.

Whatever you do, you need to fit affordability for the mortgage.

Consult an independent mortgage broker with experience of managing these kind of deals which are called concessionary purchases.