Concessionary Mortgage question

DaffyDuck316

Hi, I am a tenant and the house I am living in is up for sale. 

Am I able to ask the landlord for a concessionary mortgage, as long as they recognized it to be a gifted mortgage. 

Also, my landlord has just passed away, so I'll phrase the question again.

Am I able to ask a beneficiary solicitor for a concessionary mortgage, as long as they recognized it to be a gifted mortgage

amnblog

You can ask for what you wish, I am not sure that is your actual question.

If the Executors of the estate are prepared to sell the property to you for under the market value then, yes, that could be purchased with a mortgage as a concessionary purchase. The difference between the value and the purchase price effectively being a gifted deposit.

Be careful though as...

Few Lenders will do it
The property value is not likely to be sufficient if there is a small difference between the value and the purchase price (e.g. 10%)
The property going into probate makes everything extra complex.

MWT

DaffyDuck316 said:

Also, my landlord has just passed away, so I'll phrase the question again.

Am I able to ask a beneficiary solicitor for a concessionary mortgage, as long as they recognized it to be a gifted mortgage

How quickly do you need to get this resolved?

It could take many months before the estate is in a position where the Executor is able to dispose of assets like the property you are renting and wish to buy...

DaffyDuck316

Well the property is on the market now, and somebody came to view the house yesterday. 

My mortgage broker believes I have a lender available if I were to ask for a 5% discount. And so a few hours back, that is what I have done, and I am waiting for a response. 

Thanks for your replies, I'll let you know if I hear any more (if you are interested at all), I guess my gut feeling is that I will hit a stumbling block somewhere. 

MWT

DaffyDuck316 said:

Well the property is on the market now, and somebody came to view the house yesterday. 

Being on the market doesn't necessarily mean very much unfortunately, but a lot depends on the exact nature of the ownership of the property so if you are going to invest time and money in attempting to buy I would be inclined to ask the Executors to confirm when they would anticipate being able to exchange and complete if you were able to proceed.

amnblog

DaffyDuck316 said:

Well the property is on the market now, and somebody came to view the house yesterday. 

My mortgage broker believes I have a lender available if I were to ask for a 5% discount. And so a few hours back, that is what I have done, and I am waiting for a response. 

Thanks for your replies, I'll let you know if I hear any more (if you are interested at all), I guess my gut feeling is that I will hit a stumbling block somewhere. 

Expect a much larger discount than that if you are funding it all on mortgage. If you have some cash deposit also, you may be in with a shout.

DaffyDuck316

Well I did request a 10% discount, but it got rejected. I was surprised my broker said I was able to ask for a 5% discount.

I'm happy to stay here until the exchange and complete MWT, maybe try to put together somewhat of a cash deposit while I am waiting in case I need it. 

MWT

DaffyDuck316 said:

I'm happy to stay here until the exchange and complete MWT, maybe try to put together somewhat of a cash deposit while I am waiting in case I need it. 

It may be worth making that point clear to them if you've not already done so as it highlights the value to them of giving you the 5% discount when compared to other buyers that may be less patient.

I just hope the 5% is enough and that the asking price is very reasonable or the lenders valuation may not yield the full amount you need.

DaffyDuck316

Thanks, that is some really good advice MWT.

Could anyone tell me, give a simple example of how a lenders valuation could affect what I can afford with a discount. I just can't get my head around it, what happens if the valuation is more or less than the asking price.

BarelySentientAI

DaffyDuck316 said:

Thanks, that is some really good advice MWT.

Could anyone tell me, give a simple example of how a lenders valuation could affect what I can afford with a discount. I just can't get my head around it, what happens if the valuation is more or less than the asking price.

If the lender values it lower than you expect, then you might not be able to get a big enough mortgage and need to come up with more cash.

Example:

House price £150,000.

Agreed discount 10%, so purchase price £135,000.  You are getting 90% mortgage, 10% deposit (the discount)

Lender values the house at £135,000.  You can't borrow £135,000 against a £135,000 house, so the lender says they will only let you borrow £125,000.

You now need to find £10,000 cash to make it up to the agreed purchase of £135,000 or you can't buy.

DaffyDuck316

Wow, thanks for that example. A deviation in the valuation can quickly become costly. I think I am going to brave it out, just try my best, and see what happens.