Parental help / loan to buy

Red85

Hi I'm looking for some advice... We were staying with my parents who last year moved out into a new home and we have stayed here.  Looking to get on the property ladder and we have spoken about buying the house off my parents. Now this is where is gets complicated. Can my parents  sell me the house for half it's valuation meaning we are immediately at 50% equity. This makes it easier to get said mortgage I would assume and obviously we would need a smaller deposit . As far as I'm aware my parents won't need to pay capital gains if they sell their house in the next few months due to their been a limit from leaving a main residence to a new main residence .. although that needs to be looked into further. Secondly the under valuation is basically a loan agreement so we would get in in writing that we still owe the other 50% in monetary terms down the line on an agreed date e.g in five years time. So in five years we could sell the house and return the money to them or we could remortgage as we would by that point have even more equity in order to give them their money back. .. can anyway who is clued up with all of this tell me if this is even possible. Right now we wouldn't get the full mortgage amount as although are credi rating has improved in the last 6 years there are some black markers. We also have young dependent but every months our savings are increasing and all is looking good . Employment wise we are secure. 

amnblog

Technically, yes, your parents can sell to you under value using the difference in value and price as the deposit.
In practical terms 'no'. If you have a poor credit history you will need a minimum 5% cash deposit from your own funds.
Finally, your parents need to be 'gifting', not 'lending' you the equity.