Concessional Purchase

Posted on 21 February 2018 by Dave

I am looking at doing a house swap. My flat is currently on the market at 120k and have 97k left on the mortgage. The house I am after is on the market at 190k but I have agreed a price with the owner 120k. Can I get a mortgage for the full 120k given that the property is valued at 190k?

Hi Dave

This will depend on who the vendor is. Lenders will usually only consider lending against the value if you are buying at a discounted purchase price from a member of your family.  In this instance there are several banks who will consider lending you 100% of the purchase price and you would not need to put down any personal deposit.

If however, the vendor is an unrelated third party, such as a builder or property developer then you would need to put down a personal deposit of at least 5% and they would want to know why you have been able to agree a reduced purchase price.  Quite often the reduced price merely reflects the fact that they haven't been able to sell at the original asking price.

In both scenarios the value of the property will need to stand up to independent verification by the lenders surveyor.

I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers.  Please call 0344 346 3672 and they will then be able to help you find the right mortgage for your situation.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


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