Borrowing money for a mortgage

silvercar

Flugelhorn said:

DaffyDuck316 said:

The house is for sale for £250000

I made an offer for the house for £225000.

This would open the door for me to get a concessionary mortgage. If accepted I would not need to have money for a deposit.

Someone please tell me if that makes sense, my understanding of mortgages is quite limited, which is probably why my posts are confusing.

Thanks.

OK the price for sale is 250, you have offered 90% - the owner may or may not accept this 

for a concessionary mortgage it would need the landlord to say that the 25K was a gift - are they are a relative? are they likely to give you 25K? 

If not then it is fraud

If the offer for 225K is accept then you probably still need a deposit - have you got some savings?

The landlord can say it’s an undervalue sale to existing tenant, doesn’t have to be a gifted deposit.

Flugelhorn

silvercar said:

The landlord can say it’s an undervalue sale to existing tenant, doesn’t have to be a gifted deposit.

got it! because it saves them costs etc - fair enough 

DaffyDuck316

Whew, you had me worried there, my broker sounded happy for me to put the offer in, I didn't think I was being fraudulent 

Mutton_Geoff

The mortgage valuation will never exceed your offer price so it's academic. Your borrowing has to stack up on the actual numbers not based on whether the property is "worth" 10-20% more.

silvercar

Mutton_Geoff said:

The mortgage valuation will never exceed your offer price so it's academic. Your borrowing has to stack up on the actual numbers not based on whether the property is "worth" 10-20% more.

I would have thought a good mortgage broker would have been able to explain the ‘tenant buying saved landlord costs’ scenario to a lender. That’s why it’s called a concessionary mortgage. All hinges on the valuation.

Mutton_Geoff

silvercar said:

Mutton_Geoff said:

The mortgage valuation will never exceed your offer price so it's academic. Your borrowing has to stack up on the actual numbers not based on whether the property is "worth" 10-20% more.

I would have thought a good mortgage broker would have been able to explain the ‘tenant buying saved landlord costs’ scenario to a lender. That’s why it’s called a concessionary mortgage. All hinges on the valuation.

I understand that but I reckon closer scrutiny will be paid to a valuation in these circumstances, possibly even a red book valuation by a RICS surveyor rather than 3 estate agents finger in the air type. Whatever happens, the lender will use the borrowing figure on their own valuation rather than attempt any market valuation.