Is this true? Sitting tenant's not requiring a deposit?

[LoudestRoar]

We rent privately at the moment. Someone has suggested that we ask our landlord if he wants to sell the house to us. If so, she says that we won't need a deposit, as we are already in the house.
She used to work in this area years ago, and I have a feeling this is outdated information.
Any ideas anyone please?

I used to work for a bank in the distant past, I don’t think there’s such a thing as 100% mortgage post-Northern Rock.

There are lenders who'll give you that but they're specialised. My friend has just got 110% but he had to meet extra criteria.

Rubbish - you'll need a deposit just like anyone else getting a mortgage. Your rental deposit should be returned to you at some point in the purchase process, but that's completely different.

I meant rubbish to what the OP had been told!

Thanks, I thought so. Would be wonderful though if it was true!

You can still get 100% mortgages but those I have seen are expensive or involve tying up capital elsewhere.

YellowPants9 do you happen to know who with please?

If you get a discount on the purchase price, e.g., right to buy from housing association or council, then I think some lenders consider your discount to be your deposit but I don't think that applies to private landlords selling properties.

We are being gifted the deposit as fil is gifting us the 10% equity. We already live here, I don't know if it works for non family members.

I think the thing about sitting tenants is that if a new landlord buys the house with you as a sitting tenant (ie you’re still renting) you don’t need to pay a deposit to the new landlord.

The deposit you pay to the bank when you buy a house is an arrangement between you and the bank so you not sure why you already living there would make any difference. But I’m not an expert so happy to be corrected!

Off the top of my head I can't remember, I'd have to ask. But it was secured through an independent specialist mortgage broker & they had other assets as part of the deal.

What you have been told is rubbish

You’ll need to put 10% down on exchange whether you have a mortgage or not. And your mortgage company doesn’t care whether you live there or not it’s the requirements of the loan that you have X deposit for whatever interest rate and also so they can get their money back from the house if you default.

I guess you might get a discount on the market price as they wont need to instruct an estate agent or have a void period from rent while you go through buying process.

Thats different from no deposit though as you would still be trying to get a 100% mortgage for the agreed price. If they are even available now.

Thanks all. Figured it was too good to be true!