First time mortgage - no deposit 75% LTV?

liamgdr · 20 November 2018 at 12:13PM

Hey,

Ive tried searching the forum for an answer but my question is quite specific, so far I haven't been able to find an answer, apologises if it has already been answered elsewhere.

My mother is selling her house to my brother. The house is valued around £200k but she is selling it to him for £150k. as a first time buyer would he need to pay any sort of deposit? my initial though is no as the LTV is 75%, he's is obviously going to speak to a mortgage advisor, I'm just curious at the moment.

He is going to pay the remaining £50k to my mother when and if possible, she wanted to retain 25% ownership but we've been told this can create problems with income tax?

Cheers,

Liam.

AnotherJoe · 20 November 2018 at 3:00PM

I think it will create problems with lenders not income tax (indeed why do you think income tax has anything to do with it???).

It might work if mother provides the £50k as a loan with a charge on the house, rather than actually owing it. A few lenders will allow this. A few will take gifted deposits. You need one that does both. He needs to see a mortgage broker.

liamgdr · 20 November 2018 at 3:10PM

I don't understand how income tax is affected either, I'm just hearing this through my mother at the moment not directly from the accountant.

Agreed he needs to visit a broker for proper advice.

AnotherJoe · 20 November 2018 at 3:28PM

Where does your mother live? Elsewhere? In this house? If the latter, will she be downsizing with the £150k? Note that if she did retain ownership at 25% (which i suspect isn't possible if a lender is involved) then if she bought another property she'd have to pay an extra 3% SDLT on it.

First time mortgage - no deposit 75% LTV?

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