Deposit/Equity Release

NathanMorgan

the house im looking to buy currently belongs to my inlaws and they are looking to sell it to us for £100k and the house had a valuation of 200k recently.

in this situation is it possible to go ahead with the mortgage application without needing the minimum 5% deposit as the house has so much equity in relation to the 100k asking price?

Also the house needs renovating and im wondering what is the best way in releasing equity, do I ask for say £150k mortgage and my inlaws then give us the £50k back or is there a better way in going about it?

[Deleted User]

You ask for £150k mortgage
Mortgage company sends £150k to your solicitor
Your solicitor sends £100k to your inlaws solicitor
your solicitor sends £50k to your bank account

You put the application as an 'Undervalue Transaction' or Below Market Value.  Not all lenders do them.   Some lenders restrict you to the purchase price only. Some allow additional borrowing for home improvements  

Not a difficult case really but one for a broker who knows which lenders will do it and which ones wont

NathanMorgan

will I still need to put down a deposit in this situation or not?

[Deleted User]

NathanMorgan said:

will I still need to put down a deposit in this situation or not?

no, the deposit is the £50k left in the property.  You are being gifted £50k equity in this case

amnblog

There are two potential curves balls here.

1. If you have a poor credit history the only available Lenders will likely be those requiring a minimum 5% deposit from you.

2. If your in laws intend to be resident in the property your potential lender list is very small.

as stated above, a case for a Broker