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Help from the financially savvy!

(15 Posts)
Olivetree615 Sat 23-Mar-19 17:55:57

Hi, I feel I’m being very dumb but I cannot get my head around where this deposit will come from.
OH and I have lived together for years, renting. Recently his DF has been talking about selling his house to us and with the money he will buy himself a flat (more convenient with his age).

My issue is, we do not have a deposit? OH has told me the deposit will come from DF selling his house to us..
can anyone explain how this works? OH has tried but I cannot understand how we can get money from the sale of a house if we’re the ones buying it?

Onepuddingisneverenough Sat 23-Mar-19 17:59:12

It would be classes as a gifted deposit
You’d need to speak to a FA
It’s doable but not all mortgage companies will accept gifted deposits

Asdf12345 Sat 23-Mar-19 17:59:43

He buys a flat for say 80% of the value of the house and gifts you 20% I would guess. May be tricky to find a lender who will accept that but worth a shot.

Also has issues re deprivation of capital if he has to go into a home any time soon.

Onepuddingisneverenough Sat 23-Mar-19 18:00:12

Or it could be seen that a portion of the rent you have been paying has been set to one side on almost a “rent to buy” situation

Sindragosan Sat 23-Mar-19 18:00:14

I'm guessing (and not a financial expert) that it's being sold to you at less than market value? So the value of the house is more than the value of the loan and so the loan-to-value ratio is less than 90% (or even lower?)

Not sure how this works in terms of mortgages, I'm hoping your dh has taken financial advice?

Olivetree615 Sat 23-Mar-19 18:05:14

Thank you for all the replies! This is all still in the very early ‘discussion’ stages, I mean a day or two early.. we will definitely be getting advise from a FA if/when we move forward!
Just to be clear, we have been renting a separate house, not DFILs, so no rent-to-buy situation

WBWIFE Sat 23-Mar-19 18:08:06

OP I don't think it works like that. We have bought a house 30k under market value but we still have to pay a deposit. The lender will just value it at what you are buying it for

Girlsnightin Sat 23-Mar-19 18:17:23

I think you need a 100% mortgage lender. I'd recommend London & Country mortgage brokers. Fee free and very experienced so will have come across this before. As long as your income supports the amount you are borrowing it should be ok. But there won't be many companies around, but they'll find you the cheapest.

Girlsnightin Sat 23-Mar-19 18:18:37

And your right, you won't get any money from the sale for the deposit. There won't be a deposit.

Olivetree615 Sat 23-Mar-19 18:24:21

Thank you girlsnight smile

HollowTalk Sat 23-Mar-19 18:25:31

Would it be something like this...

He sells the house to you for £200,000
He buys somewhere else for £150,000
He gives you £20,000 as a deposit, so the house actually costs you £180,000 (he's actually really selling for £180,000)

By the way, you'll be advised to marry on here (by me, too!) if you're in a long term relationship and buying property!)

Olivetree615 Sat 23-Mar-19 20:05:19

I think that might be it hollow! Thank you! Ah yes I was waiting for the marriage thing to pop up grin

HollowTalk Sat 23-Mar-19 20:09:43

Well, it's worth thinking about!

Of course my plan above would only work if he has £20,000 (or whatever) to give to you before he sells the house!

AllTheFours44 Sat 23-Mar-19 20:16:27

How could your partner not explain this to you in a manner you understand?!

Alarae Sat 23-Mar-19 20:23:22

I believe what you need to Google is concessionary purchase.

It's when a property is sold to you with a portion of the equity gifted and that is used as the deposit. One for a mortgage broker though.

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