Scottish Mortgage Advice

gfriel2104

Hey guys,

I'm a first time buyer, looking at purchasing my first house in Scotland with my girlfriend.

The house is owned by her aunt and uncle, and we have been renting the property for around 1 and a half years. They are looking to sell in around Spring and are willing to sell us the house at a price that could even be much cheaper than the valuation (probably much less, but could even be 35k cheaper).

I was just looking to see if anyone has any clarification about any of my research and can tell me if I'm looking along the right lines.

I have been specifically looking at First Direct mortgages, as they have a good interest percentage, unlimited overpayments (although 3% early repayment fee) and most importantly no booking or application fees.

So from my understanding, I would need to pay for legal fees (which are usually around £850 - £1000) and maybe an electronic fee.

From my reading, the sellers in Scotland are required to provide a home report, which would include a valuation and survey. If previously discussed with the lender, they may accept this in place of the valuation and survey from us, the buyers, saving us money.

So in short, I'm thinking legal fees of about £850, the transfer fee of about £50 and my deposit are all that I would need up front. Do I have this correct or am I missing some areas?

With this, is there any scope to reduce the legal fees as I am buying from friends/family and it will cut out a lot of the solicitors job?
---

Another side question; as a help to us the sellers suggested we pay £50,000 instead of £45,000. Upon purchase of the house, we would immediately be given our £5,000 back. (This is all safe. We are very close with the sellers and they've done a tonne for us. There's no risk).

This would raise my overall amount due of course, but it would mean we are almost completely debt free right away. Are there any downsides other than the increased interest-valid amount that I'm missing?

Cheers folks.

DottieDam

My initial quote for solicitors fees was £600 but it went up as had to register property for the first time.

I don't think buying from family will stop them from doing searches but it would presumably reduce number of missives. So you are probably looking at £600 also (as an initial quote, if you go with a cheap online Glasgow based firm).

My advice would be to pay for the valuation because I've been delayed by transcribing of Home Report and subsequent misunderstandings in the Home Report. For us this would have been £130 and I've been delayed five weeks so had to pay an extra months rent at £650! Although I am sure not all banks are confused by the concept of Scotland.

Thrice

I bought my home (in Scotland) from my father, we both used the same solicitor and I think I paid about £1100 in fees? My dad paid just a bit less as well. Make no mistake, unless the solicitor is also a family friend, then you will pay everything that needs paying!

We didn't get a home report either, the home had been in our family for about 25 years by the time I bought it, so I knew all I needed to know.

Also, we did a similar thing with regards to the money, home was valued at £90k, mortgage for £81K (didn't pay a deposit as it was a concessionary mortgage via Halifax). Dad got £81k in the bank and gave me £6k to pay off my credit card, left him with £75k and he paid all the fees.

Hope it all works out for you

gfriel2104

DottieDam wrote: »

My initial quote for solicitors fees was £600 but it went up as had to register property for the first time.

I don't think buying from family will stop them from doing searches but it would presumably reduce number of missives. So you are probably looking at £600 also (as an initial quote, if you go with a cheap online Glasgow based firm).

My advice would be to pay for the valuation because I've been delayed by transcribing of Home Report and subsequent misunderstandings in the Home Report. For us this would have been £130 and I've been delayed five weeks so had to pay an extra months rent at £650! Although I am sure not all banks are confused by the concept of Scotland.

Hmm that's pretty solid for solicitors fees. As I said I don't have a tonne of unexpected question marks to come out of nowhere so whatever the most budget solicitor I can get is, that'll do nicely. I'll do some shopping around and get some quotes but your number is promising. I'm based just outside Glasgow as well so there's some good options.

With the home report, I was thinking of making talking with the lenders before having the sellers arrange their home report. Perhaps they would have a specific home report they would accept, and in that case it would cut the costs. The up front fees would be the biggest setback because we'll be sorting them through a credit union loan and we'll have a cap on how much we can take out of course.

Luckily in my situation if something unexpected like in your shoes came up, I expect we'd maybe work something out regarding rent as the sellers own the house outright.

Thrice wrote: »

I bought my home (in Scotland) from my father, we both used the same solicitor and I think I paid about £1100 in fees? My dad paid just a bit less as well. Make no mistake, unless the solicitor is also a family friend, then you will pay everything that needs paying!

We didn't get a home report either, the home had been in our family for about 25 years by the time I bought it, so I knew all I needed to know.

Also, we did a similar thing with regards to the money, home was valued at £90k, mortgage for £81K (didn't pay a deposit as it was a concessionary mortgage via Halifax). Dad got £81k in the bank and gave me £6k to pay off my credit card, left him with £75k and he paid all the fees.

Hope it all works out for you

I'd like to see a little bit about the valuation and get some aspects checked out as the house is quite bad for mould and it'd be good to see the extent of it, but there should be a small amount of things popping up as we've lived here for a little while now and know the day to day inside out.

So do I have everything read up on regarding the initial fees or is there one or two little hidden things I've missed?

Appreciate the rapid replies folks.

Pixie5740

gfriel2104 wrote: »

Hey guys,

I'm a first time buyer, looking at purchasing my first house in Scotland with my girlfriend.

The house is owned by her aunt and uncle, and we have been renting the property for around 1 and a half years. They are looking to sell in around Spring and are willing to sell us the house at a price that could even be much cheaper than the valuation (probably much less, but could even be 35k cheaper).

I was just looking to see if anyone has any clarification about any of my research and can tell me if I'm looking along the right lines.

I have been specifically looking at First Direct mortgages, as they have a good interest percentage, unlimited overpayments (although 3% early repayment fee) and most importantly no booking or application fees.

So from my understanding, I would need to pay for legal fees (which are usually around £850 - £1000) and maybe an electronic fee.

From my reading, the sellers in Scotland are required to provide a home report, which would include a valuation and survey. If previously discussed with the lender, they may accept this in place of the valuation and survey from us, the buyers, saving us money.

So in short, I'm thinking legal fees of about £850, the transfer fee of about £50 and my deposit are all that I would need up front. Do I have this correct or am I missing some areas?

With this, is there any scope to reduce the legal fees as I am buying from friends/family and it will cut out a lot of the solicitors job?
---

Another side question; as a help to us the sellers suggested we pay £50,000 instead of £45,000. Upon purchase of the house, we would immediately be given our £5,000 back. (This is all safe. We are very close with the sellers and they've done a tonne for us. There's no risk).

This would raise my overall amount due of course, but it would mean we are almost completely debt free right away. Are there any downsides other than the increased interest-valid amount that I'm missing?

Cheers folks.

The part in bold sounds fraudulent.

How much of a deposit are you putting down or are you planning to use gifted equity (i.e. the £35k) as the deposit? If it's the latter do First Direct accept gifted equity as a deposit?

davidmcn

gfriel2104 wrote: »

From my reading, the sellers in Scotland are required to provide a home report

No Home Report required if the property isn't put on the market, so up to you what you agree with the sellers. The lender only requires a basic valuation, not the full Home Report.

Another side question; as a help to us the sellers suggested we pay £50,000 instead of £45,000. Upon purchase of the house, we would immediately be given our £5,000 back. Are there any downsides

Why would you be doing that? You'd need to declare it to your lender.

gfriel2104

The plan would have been to get a 90% LTV and have the sellers return the 10% upon completion but if there's potential legal implications I'll just nix that idea right now. Appreciate yous steering me right.

David, thanks a lot with the home report. Thats a big help as I was all in on my precious plan (hadnt discussed with the sellers yet). I think they intend on getting a valuation done regardless but Ill definitely beed to look at the survey then. Really appreciate it.

ashleighcraig_2

Hi all, I'm looking for some advise.
If a property is worth £75,000 but I would only need £35,000 to purchase the property, why would I still need a 15% deposit based on the £35,000 although the property is worth £75k? Apparently you can only borrow 85% of what you are getting the house for and not 85% of the house value. You need to wait 6 months after purchase before you can then get it revalued and borrow the 85% on the value of the property. Why can't the LTV be there when you first purchase the house? I don't understand this at all. 

ashleighcraig_2

ashleighcraig_2 said:

Hi all, I'm looking for some advise.
If a property is worth £75,000 but I would only need £35,000 to purchase the property, why would I still need a 15% deposit based on the £35,000 although the property is worth £75k? Apparently you can only borrow 85% of what you are getting the house for and not 85% of the house value. You need to wait 6 months after purchase before you can then get it revalued and borrow the 85% on the value of the property. Why can't the LTV be there when you first purchase the house? I don't understand this at all. 

Advice, not advise. Thanks. 

MovingForwards

ashleighcraig_2 said:

Hi all, I'm looking for some advise.
If a property is worth £75,000 but I would only need £35,000 to purchase the property, why would I still need a 15% deposit based on the £35,000 although the property is worth £75k? Apparently you can only borrow 85% of what you are getting the house for and not 85% of the house value. You need to wait 6 months after purchase before you can then get it revalued and borrow the 85% on the value of the property. Why can't the LTV be there when you first purchase the house? I don't understand this at all. 

Start your own thread if you want opinions.

ashleighcraig_2

MovingForwards said:

ashleighcraig_2 said:

Hi all, I'm looking for some advise.
If a property is worth £75,000 but I would only need £35,000 to purchase the property, why would I still need a 15% deposit based on the £35,000 although the property is worth £75k? Apparently you can only borrow 85% of what you are getting the house for and not 85% of the house value. You need to wait 6 months after purchase before you can then get it revalued and borrow the 85% on the value of the property. Why can't the LTV be there when you first purchase the house? I don't understand this at all. 

Start your own thread if you want opinions.

I'm trying to work out how I do that.