classic Subaru Si

Long story short, got approved yesterday to buy my parents house at 20k under what it's worth with a 5% deposit. Got a call tonight off barcleys saying that the underwriters want a 10% deposit due to us buying the house under value?? Totally gutted as we don't have the extra funds to do this, hence why my parents were willing to sell to us at a reduced rate. If anyone can shed some light as to why they would want a bigger deposit on a house that's worth a lot more than what's required, and coupled with the government backed 5% scheme-I'm at a total loss to be honest....

stuart148

iTrader: (12)

is it not possible to buy it at the full value and say your paying them the 5% direct ?

cookstar

iTrader: (6)

Change mortgage provider. I've never heard of that before, I'd imagine a mortgage company would be more than happy to lend if your buying under value.

Failing that, can you borrow the extra 5% from your parents! they would get it back straight away, you'd pay a small amount of interest of it but it will be peanuts.

bustaMOVEs

iTrader: (31)

Goto Halifax or tsb. (tsb will give you £500 cash on completion too)

classic Subaru Si

Why the complications though? Mum and dad want to sell at x amount and we want to buy? I just get the feeling the bank is trying it on big time, or is this the general runaround you get nowadays?

cookstar

iTrader: (6)

I've bought plenty of houses under market value, and have never had anything like that.

Are you using a HTB mortgage, as you mention only 5% deposit! the rules may be different with those.

classic Subaru Si

Yes, we are using the htb scheme. But surely that's what it's for, not nailing is on the deposit?

Midlife......

iTrader: (2)

It's one way of disposing of an asset to hide from HMRC.......... something they don't like and a bit naughty in their eyes.

Shaun

paulr

Are you getting a full survey?

classic Subaru Si

Just the basic survey. Nothing dodgy going at all, mum and dad just want to help us out and get on the ladder

classic Subaru Si

Sorry, just to add we are not using the htb scheme

hodgy0_2

Yes could be tax implications, as the reduction in value could be seen as a gift

Devildog

It's unlikely to be anything to do with tax as far as Barclays is concerned.

It could be, however, that they have appled the purchase price as the value for the loan to value calculation, rather than the survey valuation, which in turn is throwing up the need for a bigger deposit to give the same mortgage deal.

Phone Barclays and and ask why - get more info from them.