Does she need to pay a deposit ?

S

Snibs08

Guest
Just wondering if anyone has any knowledge or experience of how mortgages work. Here's my situation:

My sister wants to buy my house , which I will sell to her at a discount. But she does not have any deposit only maybe € 5k in savings. Can she still get a mortgage without having to pay a deposit . Dare I say can a solicitor " pretend" that deposit has been paid even though it hasnt. Bank still wins as property is worth far more than what the mortgage would be for.

Any advice is appreciated >>>>
 
Snibs08 said:
My sister wants to buy my house , which I will sell to her at a discount.
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Bear in mind that such a discount could have tax implications for you and/or her. Post more details if you want feedback. Is this your home or an investment property? How much is it worth and what you are you selling it for? And so on.
Can she still get a mortgage without having to pay a deposit .
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Do you mean can she borrow 100% or thereabouts of the discounted purchase price? Probably not and the lender will probably only advance nearer 92% or thereabouts.
Dare I say can a solicitor " pretend" that deposit has been paid even though it hasnt.
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No reputable solicitor is going to play silly buggers with the lender like this. The lender will need to know the actual purchase price charged to your sister and won't care that it is a discount below the market valuation. They will most likely lend a maximum of c. 92% of this and your sister will need to come up with the rest.
 

What you are doing is legal and resaonable if done the correct way. It is simply a case of making a gift to your sister.

I would suggest a "correct" way might be as follows (but a solicitor should be consulted):
  • Get an independent fair market valuation for the property that could stand up to revenue scrutiny.
  • Sister gets mortgage on basis that she will fund Y% from mortgage and 100-Y from your gift.
  • Engage a solicitor and instruct them that you wish to sell the house to you sister and gift her (100-Y)% of the market value to help finance the deal.
  • You should be able to net out the equal sums that you and your sister will owe each other at settlement.
Then you sister needs to:
  • Pay the stamp duty payable on the fair market value
  • Pay any gift tax payable
 
Thanks Guys

I just knew there had to be a way around it . The gift idea is exactly what I will try to do cos at the end of the day , I am gifting it to her.

Thanks again for your input
 
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