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  1. #1

    Mortgage to buy parents house.

    I'm new to this forum so apologies if this question has been asked before. My parents are downsizing and are looking to sell their house. They are willing to sell me their property for much lower than it's value however I would still need a mortgage. I don't currently have much in savings so my question is: Will a bank give me a mortgage without a deposit seeing as the loan to value rate would be around 60%?

  2. #2
    Gifting away their equity needs to be considered carefully.

  3. #3

  4. #4
    As long as there's quite a big gap between market value and sale price, then yes, several lenders will accept what's called a "gifted deposit" and that means you don't need to provide one. 40% below market value would seem to qualify well.

    Work with a broker to identify the best lender for your situation.

    Regards gifting equity away, as long as your parents are not frail and could reasonably expect to need to be paying for care soon, there shouldn't be an issue, especially if they buy another house, so they aren't liquidating their wealth, they will still have a house that potentially could be used to fund care even if retrospectively after death.

    The issue that thrugelmir raises is where someone gives away their house so they don't have have to pay care home fees. This doesn't really seem to be an issue here, it's not as if they are giving away their whole house, what's the difference between this and them always have lived in a smaller house and given you money over the past 20 years (say)

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