Reduced market value purchase from parents

Roz3625

We're buying a house from my parents at reduced market value and therefore are being given £20,000 in gifted equity.

Has anyone done this before and who did you use? I've heard some lenders are happy to include the gift towards the deposit meaning we would need less cash ourselves.

Ideally we will put between £10,000 to £20,000 in ourselves and also have the £20,000 included from the gifted equity.

So for an easier example:

A house was valued by a mortgage surveyor at £150,000, parents sell to child at £130,000. We would like the £20,000 as a gifted equity deposit plus £10,000 of our own money so the mortgage amount would be a purchase price of £150,000 with a deposit of £30,000? Meaning the loan amount is £120,000?

Or is the only way on the above example to do it as purchase price of £130,000 with a £10,000 deposit? This would lead to worse mortgage deals.

I know building societies don't tend to accept this but Google says banks like TSB/NatWest do include this as a deposit but any advice from people who have done this would be great.

ACG

Pretty much all lenders will consider this - including building societies.

Nationwide for example has something called "Genuine bargain purchase" but pick a lender at random and there is a good chance they will do - obviously check with them beforehand. Or use a broker and they will do the research on your behalf.

Yorkie1

Just to complete the picture, OP was suggested to post on this board from their post on the House buying board 😊