Mortgage Brokers for First Time Buyers
Mortgage Chain are Mortgage Broker for First Time Buyers and a common transaction we see is a Concessionary Purchase.
This is where a family member gifts a property, below market value.
Being Gifted a Property from a Family Member
This is where you purchase a property from a family member, usually at a discounted price. That discount can then act as your deposit, meaning no physical deposit is required as part of the transaction.
A family member will provide you with the opportunity to buy one of their properties, at a discounted price. This is known as a Concessionary Purchase, usually, that discount is somewhere between 10% – 25% and that is the region where the lenders will be happy to work. As Mortgage Broker for First Time Buyers, we are seeing this more often where family members offer support in this way.
It is really important to have the correct solicitors in place who understand a concessionary purchase and understand how it works, such as the stamp duty implications, as these could be different. The criteria is slightly different and the way it’s engineered is different to a normal purchase so it’s very important that the solicitors have had previous experience with this type of transaction.
Not every single mortgage lender are happy with a concessionary purchase or allow you to use this as your deposit. Some will place restrictions on the loan to value. However, there are one or two High Street lenders that are perfectly happy with it and who we have done many transactions with, in this type of situation. Mortgage Chain are Mortgage Broker for First Time Buyers and have great relationships with all the lenders that support this process.
Sometimes the mortgage products will be different as well so again it’s really important that you pull information from the right pool of mortgage lenders. If you do go direct to a lender make sure 100% that they allow this type of transaction in their criteria, as there are many types of different types of purchases, that are similar, such as gifted deposits, gifted equity and vendor gifted deposits. This is different from a concessionary purchase where the vital part is that you are receiving a discount below market value.
A concessionary purchase can be for both residential and buy to let so you can purchase the property on a residential basis to move in yourself or it can be on a buy to let basis where you rent the property out.
If you are being gifted a property by family member, below market value, please get in touch so we can provide you with your options and get this transaction right for you, first time.
Question of the day
“Are you being gifted a property from a family member” ? Let me know in the comments below!
Mortgage Broker for First Time Buyers