Buying house for free off parents & and using "mortgage' to pay for renovations

MrsMonaghan

Hi guys , currently living in northern Ireland and would love some advice !!
My husband's parents have just build a new bungalow further up their land ( 25 acres they own so won't be too close to this house  ) and have offered to give us their old house which is a 1980s 3 bedroom house .
 They are building a new driveway so it will be separate from ours and if we take the house we will have it completely sealed off on its own.

We plan on selling our current house which we will only make £20,000 profit off as we only bought it last year but we hate the location . And then pretend to the banks we are buying this house off them and need a  a "mortgage" of about £70,000 but the house is been given for free so using this money to complete renovations , extension , gardens etc. .. his parents would send us money as and when we need it . 
The house is currently worth around 80,000 I would say but have to confirm in getting this valued so it would be "sold to us " mortgage wise slightly under value 
I'm sure there's plenty of legal do's and dont's behind it which we don't have a clue behind it and would love to know everyone's opinion on wether this is possible or your tips on the best way of borrowing a large amount of money like this for renovations

Thanks guys looking forward to what you've to say !!! 

foxy-stoat

Doubt you will be able to pull £70,000 equity out of a newly gifted property if its only worth £80,000.
Can you not use your £20,000 and maybe get a smaller personal loan and save up the rest for the renovations?

MrsMonaghan

Well it would be a 90% LTV mortgage which are common enough here in NI ? It's worth £80,000 and we would be borrowing £70000
What id like to know is if this is do-able as we would like to do the renovations Alll in the one go without having to save too much . 
Is it possible to apply for a mortgage to "buy " it off his parents for £70,000 and then when they get the mortgage money from our bank  ,, we get the money sent to us every now and again as and when we need it to pay for renovations

warby68

You don't need to set it up as complicated and pretend to the Bank. Just look at it the other way round. You can simply buy it as Stage 1 then parents gift you the cash for renovations as Stage 2. Thus the house is purchased in a straightforward way and the gift is the renovation money.