FTB - Stamp Duty Question

RandomGuy87

Hi all, looking for some advice as a first time buyer. 

We currently have £12k saved for a deposit and we're looking at taking a mortgage with a LTV of 95%.

I've seen a house that I love that is currently up for sale for £310k. Most lenders are prepared to let us lend £300k.

At the moment I'm just trying to figure out our options. To get a LTV mortgage of 95% we would need to save another £3k which should be achieved in the next few months, sooner if we needed to.

The problem would be the stamp duty. The house is in Wales so the stamp duty for this house would be £5k.

Do we have any other options to get around having to save £8k more, if we added the stamp duty to the mortgage, would this come off our deposit? If so, how much would we then need?

Thanks in advance. 

Slithery

RandomGuy87 said:

Do we have any other options to get around having to save £8k more?

Unfortunately not.

user1977

Paying less than £310k would be one obvious solution! Is it actually going to sell for that?

RandomGuy87

user1977 said:

Paying less than £310k would be one obvious solution! Is it actually going to sell for that?

I would hope that we could get it for less than that. 

If we were able to get it for £300k, our deposit of £15k would be 5%.

Can we add stamp duty of £5k to the mortgage making it £305k and thus meaning our 5% deposit needs to be £15,250? 

Slithery

You can't add it to the mortgage, you need to have the money saved.

RandomGuy87

Slithery said:

You can't add it to the mortgage, you need to have the money saved.

This article suggests otherwise? 

https://www.moneysavingexpert.com/mortgages/stamp-duty/#HO 

Slithery

Not if your at maximum LTV as the lender will only let you have 95% of the value of the property, not 95% of property+SDLT.

grumiofoundation

RandomGuy87 said:

user1977 said:

Paying less than £310k would be one obvious solution! Is it actually going to sell for that?

I would hope that we could get it for less than that. 

If we were able to get it for £300k, our deposit of £15k would be 5%.

Can we add stamp duty of £5k to the mortgage making it £305k and thus meaning our 5% deposit needs to be £15,250? 

It is possible to add stamp duty (or in your case LTT - it's not called stamp duty in wales) but this increases the amount you borrow and would impact LTV.

Adding this to mortgage doesn't work in the way you have described.

If you offer 300k with a 15k deposit the bank agrees to lend you 285k - 95%.

If you try to borrow another 5k for LTT, you are then asking the bank to lend you 290k ~97% which they won't do.