Stamp duty shortfall

[waitingforever]

So all our mortgage and deposit in place but we are short on stamp duty. Has any one got any ideas like bridging loans, etc that they may have used to go through the purchase. We will be fine in few months it is just the initial shortfall. It will be shame for it to fall apart because of this.

Does your or partner’s work offer a pay advance or loan? It’s worth asking the question as you never know.

Depends on your LTV surely if you can add it to the mortgage. If you have any headroom there then you definitely can add to the mortgage, or more likely take it from your existing equity which is basically what we did.

@DrySherry I don't think me having less money equates to my vendors house being worth less? If I was in their position I would tell me to take a hike. But for clarification, the house we are buying was very popular and had several offers on it, so it went for above asking price. They could ditch me in a heartbeat and sell it again. I am not in that position with my buyers, unfortunately, it's been a tough road.

When I said borrow more, that was on the understanding the deposit could be partially diverted to the stamp duty. Also who forgets about stamp duty? It's hardly a new tax. Although it has been messed around with over recent times.

"I don't think me having less money equates to my vendors house being worth less?"

No your right, I agree with that, but it does mean you having less money equates to your offer being less. I can understand why you might not be brave enough to try it given the circumstances. You could always back off and return to your origional offer though if they threatened to re market ? It depends how far along they are with having made there own plans for a sale to you to go ahead. Realistically there are not many areas at the moment where they will instantly find another buyer.

That will wholly depend on the property. Some highly desirable ones still sell very quickly and some types of property where there's a shortage, eg some bungalows Desirable towns and villages often see the best property selling quickly too. Thats definitely the case here as long as the price is fair.

You need to pull out of the sale.

If you cannot cover Stamp Duty, you will not have an emergency fund for the first few months (years?) of owning the property.

Not necessarily. You’re reaching there, more info is needed before that can be said, ie percentage of deposit that can be used etc, how much the shortfall is.

No, they cannot afford the property.

If they need to take on extra loans, or borrow money from family, they cannot afford the property.

You are made aware of SDLT at the outset of the transaction. This is not a surprise to them.

Honestly, that maybe true, but you do not know. She could say she’s a 40 percent deposit for all you know.

And if she had a 40% deposit or a 95%, if you cannot pay the SDLT, you cannot afford the property.

Also who forgets about stamp duty?

I forgot my age for a whole year once. I was hardly new either; 28, in fact.

@KievLoverTwo I did that too. Added a whole year to my life 😂

@worrieddaughter97 theres a huge difference between 40% deposit and a 5% deposit. If i had a 40% deposit and needed a few grand to pay stamp duty it's as easy as making my deposit 35%. At 5% deposit you cant do that. Saying they cant afford the house regardless is nonsense.

I’m not going to respond to you further after this, as you clearly do not understand fiscally what posters are saying.

I will try for the final time.

if stamp duty is 30k, and she has a 150k deposit, and as she says, she’s not borrowed the max, she can reduce her deposit to 120 k, increase the mortgage, and use 30k from the deposit to pay the stamp duty.

now obviously we don’t know, she’s not said, she may have the min deposit and can’t afford it, or she can’t afford the mortgage payments if she does that, the point is, she’s given no detail.

Exactly.

How much are you talking about and how close are you to the limit with your deposit and affordability?

Without amounts it's impossible to say whether this is a problem that can be solved. But I'm thinking it might not be, as your mortgage advisor doesn't seem to have mentioned the blindingly obvious solution of reducing your deposit and increasing your mortgage so instead of borrowing (say) £200k and paying a £50k deposit, you borrow £202k and pay a £48k deposit and that frees up £2k to pay the stamp duty (made up amounts, we've never paid stamp duty as our house purchases have been lower than when it applies and I know the system has changed since we last bought anyway.

What if you were increasing your borrowing not for the stamp duty but to fund a new kitchen on the house? With mortgages what you say the money is for is all important. I'd go back and ask the broker if you can extend the borrowing to fund renovations.

If you have any family members who can "gift" you the cash, I'd do that, then pay it back a few months later.

The op doesn't need to give a reason if the mortgage isn't the max they can get. They just need a bigger mortgage to release deposit for stamp duty. It's what most people do. Clarity about why it wasn't factored into calcs in the first place when everyone would have mentioned it, is the odd one.

She can’t borrow more than the value, so again, she would need to reduce the deposit. As together they need to equate to the purchase price.

I don't understand why you wouldn't just reduce your deposit to pay for it- I thought thats what everyone did. Most people don't have a spare £30k or whatever laying around.

Money transfer on a credit card or a loan

Why do people answer when they don’t understand how mortgages work. She cannot just take out additional credit at this time, it impacts her mortgage availability.

Yes as others have said you keep some money back by reducing your deposit. You’ll need to check your mortgage company are still prepared to lend with the revised deposit and loan to value though.

As long as the mortgage is approved it doesn't affect her mortgage at all. Obviously don't apply for a loan before the mortgage is approved.

OP, apply for a loan/money transfer just before completion. Or get someone, who is willing, to do it for you