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Advice - buying house post bankruptcy
Gjc1982
Posts: 8 Forumite
My wife and I were made bankrupt about four years ago. This was after we entered into a voluntary repossession. During our bankruptcy we rented a house and saved what we could, we intended to get ourselves back on the property ladder as soon as possible.
After we were discharged we had enough saved for a small deposit for a house but knew we wouldn't get a mortgage with our history. My parents have no mortgage and are financially very secure. Their bank agreed to give my parents an overdraft on a new account to the value of the house we wanted to buy.
My parents now own the house and each month we make payments that reduce the overdraft. After three years living in the house and having paid as much as we could, there is now about 30-40k of equity in the property. My credit report says I have an average credit score. I would like as soon as possible to take on a mortgage to buy the house from my parents.
The question is, does anyone have any experience of what is admittedly an unusual situation? Any mortgage I apply for, be it now or in a few years, will want a deposit for the house. The deposit for the house would essentially be the equity that exists in the house I am living in and trying to buy. Is it possible to buy the house from. My parents using the equity as deposit or is there another way to go about it.
After we were discharged we had enough saved for a small deposit for a house but knew we wouldn't get a mortgage with our history. My parents have no mortgage and are financially very secure. Their bank agreed to give my parents an overdraft on a new account to the value of the house we wanted to buy.
My parents now own the house and each month we make payments that reduce the overdraft. After three years living in the house and having paid as much as we could, there is now about 30-40k of equity in the property. My credit report says I have an average credit score. I would like as soon as possible to take on a mortgage to buy the house from my parents.
The question is, does anyone have any experience of what is admittedly an unusual situation? Any mortgage I apply for, be it now or in a few years, will want a deposit for the house. The deposit for the house would essentially be the equity that exists in the house I am living in and trying to buy. Is it possible to buy the house from. My parents using the equity as deposit or is there another way to go about it.
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Comments
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Hi Gjc1982
I'm not sure anyone will be able to offer first-hand experience of a scenario as specific as the one you describe above. One observation I would make is that presumably the asking price your parents seek will presumably be reduced by the £30-£40K you've already paid - that same figure can't also be used in lieu of a deposit as it would effectively be counted twice over. A deposit should be cold, hard cash.
You may find more in the way of suggestions over on the Mortgages & Endowments and House Buying, Renting and Selling forums, perhaps.
Dennis
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0 -
Certain lenders will consider gifted equity rather than a cash deposit. It will all depend on the LTV as opposed to how much equity is in the property.
The likes of Magellan & Bluestone will consider this, you really need to speak to a good whole of market broker who can access these deals for you0
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