Property deposit from seller

kieranw7261

Hi All,

We are looking to buy our first property.
We are currently renting the property from my partners mums boyfriend.
He has told us he will give us a discount on the property.

Can this discount be applied to the mortgage deposit?

Thanks in advance

nyermen

As far as I'm aware, yes. Always assuming their valuation of the house (pre discount) is the same as the banks, any discount should be considered equity. I can't promise some lenders won't have an archaic rulebook of course.

The term "mortgage deposit" is a bit misleading. In reality, it is your contribution to the house (unless it is a special type of mortage - an offset mortgage), and the bank cares about the "LTV" (loan to value). So assuming they both value the house at 100,000 and the "relative" is willing to sell to you for 75,000, then your "LTV" is 75%.
If you had 25k saved towards the house instead, the LTV would be the same, so the bank would be as happy.

Btw - Others may be want to say to be cautious about any deal from a friend/relative, is it in writing, etc etc...

kingstreet

The landlord tenant relationship is the important one here.

The familial relationship isn't sufficiently strong. You will have fewer lenders to choose from than a true family purchase at undervalue.