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Buying a house from your parent

(12 Posts)
ALittleBitOfMagic Sun 28-Jul-13 12:16:23

My parents own a house that they rent out . They want to sell it to dh and I . However, with our current rent and expenses we can't afford to save anywhere near enough to get the deposit together .

Is there any way we could by the house without having a deposit by using my parents as guarantors or them jut signing their current mortgage over to us or something ?

Tia smile

ALittleBitOfMagic Sun 28-Jul-13 12:16:50

Woops blush buy the house smile

foxy6 Sun 28-Jul-13 12:21:01

we brought our house off my parents and didn't have money for deposit. they did a gifted deposit and no money had to change hands . it did mean my parents obviously onlying had the money from the mortgage so we're a bit out of pocket from if someone else had brought the house but they were happy to do that

ALittleBitOfMagic Sun 28-Jul-13 13:18:12

Oh that's what I wanted to hear that it can be done thanks foxy smile

Ok what I'm thinking is :

If the house is worth 90k but they sell it to us for 80k so they are giving us the 10k deposit but just taking it off the price of the house ? Is that what happened with you ?

foxy6 Sun 28-Jul-13 13:22:00

yep basically we brought for 80 k and had a mortgage for 74 k the 6 k was the deposit which was gifted so we didn't have to pay. so yr parents can say they ate selling for 90 k and are gifting the deposit of 10 k so you need mortgage for the 80 k our mortgage adviser told us about it. do you have an adviser they can help with sorting it all out.

ALittleBitOfMagic Sun 28-Jul-13 13:25:17

No my parents have dealt with the same guy for years we are going to make an appointment with him . I wanted to know if it can be done before we went though I wanted to avoid a "you want to buy a 90k house but have no deposit ?? Ha ha ha ha ha don't be so ridiculous !!" situation !! Hah gringrin

foxy6 Sun 28-Jul-13 13:26:20

yep can be done and good luck

MairyHoles Sun 28-Jul-13 13:27:52

Mortgage companies lend on a loan to value basis so yes, it could be as though you have a deposit, although be honest if they ask you directly. Also, your parents should not be deliberately depriving themselves of an asset for less than its worth if they are paying their own care home fees and running low on cash - I'm not saying they are, just reminding you that if they did need care and couldn't afford it the council might pursue you for money. When you contact the lender you tell them the value of the house and the amount you want to borrow, lenders are only lending about 90 percent of the house value just now and bear in mind a surveyor will cost a few hundred and the solicitors fees may be a couple thousand for 2 separate solicitors acting for you and your parents.

foxy6 Sun 28-Jul-13 13:34:08

we got the money for the solicitor fees from Mum and Dad who gave us back the 4 k from the mortgage as they we happen with 70 ok for the house even though it was worth more as 70k was still nearly 3 x what they paid so after paying their mortgage they had loads left over.
it really all depends on if yr parents are happy to go with a boy less know the house is going to a family member instead of a stranger

ALittleBitOfMagic Sun 28-Jul-13 13:56:19

mairy my parents are barely in their 50s both in well paid jobs and no intentions of retiring any time soon , so they are not depriving themselves of anything nor would I expect them to . We plan on selling it on in maybe 10 years time and any money we make we would give to them (they don't expect this but I couldn't keep it I would think ita rightfully theirs) so really it would be a loan .

LIZS Sun 28-Jul-13 14:01:05

You need to be careful over negotiating the purchase price. If your parents have been renting it out for a while any appreciation in value is subject to Capital Gains Tax . If the price is deemed short of market value HMRC might think they are trying to avoid this. There are allowances which may offset any charge but it is something they should consider.

ALittleBitOfMagic Sun 28-Jul-13 14:04:54

Ok thanks LIZ wil keep that in mind smile

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