Buying Parents Home

Cammywatson033

Hi guys,

Looking for some advice If possible. We are planning on selling our home in a few months and buying my wife’s parents home as they want to downsize. I’m hoping we just agree to pay whatever the home report value comes back as but is there anyway to save both buyer and seller money if possible seeing as it’s going from parents to child? Tried googling but don’t really know what to be searching for. We live in Scotland so don’t know if rules are different up here rather than in England. Thanks for any advice. 

user1977

One obvious saving is for them not to get a Home Report, as they only need one if they're putting the property on the open market.

Are you buying with a mortgage?

Cammywatson033

user1977 said:

One obvious saving is for them not to get a Home Report, as they only need one if they're putting the property on the open market.

Are you buying with a mortgage?

If they don’t get a hole report would we just agree on a price then. Yes we would be buying with a mortgage 

user1977

Cammywatson033 said:

user1977 said:

One obvious saving is for them not to get a Home Report, as they only need one if they're putting the property on the open market.

Are you buying with a mortgage?

If they don’t get a hole report would we just agree on a price then. Yes we would be buying with a mortgage 

The price is up to you, but if you're buying with a mortgage they'll need to get their own valuation (if no Home Report, that will need to be separately arranged by them) and it will be easier (for your mortgage) if the price you're paying is the market value rather than discounted.

Otherwise no real savings to be made. Obviously it ought to be a bit more straightforward given you're familiar with the property.

Cammywatson033

Great thanks. If they were to sell us it at a heavily discounted value compared to its market value would that raise some red flags with mortgage providers etc and make it difficult to obtain a mortgage?

[Deleted User]

If they sell it to you discounted then the discount vs market value counts as a gift. It's fine, people do that, but the lender probably won't consider it to be the same as if you had saved up your own deposit. Best just to ask them, or talk to a broker.

Keep_pedalling

Cammywatson033 said:

Great thanks. If they were to sell us it at a heavily discounted value compared to its market value would that raise some red flags with mortgage providers etc and make it difficult to obtain a mortgage?

It should not, they would in effect be gifting you a part of your deposit.

Tallulah_Chicken

If they sell it to you at a discounted rate, then it is considered a concessionary purchase not a gift. I bought my parents home at a discount, and our lender (Barclays) was only concerned that my Mum wouldn't be still living here, we were still putting in a deposit on the house (the reduction in value didn't count as one) and we had to buy an insurance policy in case my Mum went bankrupt, as the official receiver can confiscate the house if she were to go bankrupt within 3 (?) years and they viewed the sale as her trying to move assets out of reach of the OR. Only cost about £80 though. 

dimbo61

What plans have your Wife s parents got for the money from the sale of the property ? Have you looked at Offset mortgages and Family and friends with YBS !
Parents can open offset account in their names and save you interest on mortgage debt.