Buying a house as a sitting Tennant

mattyfez

mattyfez

mattyfez

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Joined
12 Apr 2007
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Hi just after some advice about buying my landlords house.

I've been in it 5 years and the LL has said a few times he's happy for me to continue to rent, the and if I move out it will go straight on the market.
Has also said I can get first refusal if I want to buy it.

It's basically a bottom of the market 2 bed end terrace, guesstimate the about 80k.

Im a first time buyer and happy with the place, been there 5 years obviously subject to survey etc.

I'm having a lunch meeting with them soon to talk about things, he mentioned paying my deposit (not sure how that works) and i can probably raise 5-10k from family boost the deposit, I have no savings but a good credit card report from experian and equifax, and could easily pay, as it may well work out equal or less than my rent.

Any advice? Presumably both parties will get a couple of valuations and come to a deal based on that before I apply for a mortgage? Are valuations free?

Thanks
 
The best way for you to see if its priced fairly is to go and few similar properties in the local area and weigh up the pro's and cons of each.

Valuations are more based around what the most they think someone may pay for it based on the local area. Its only worth to you what your willing to pay.

Not may people pay what the properly is 'valued' at.
 
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How much can you borrow in credit cards?

Can you borrow as much as you can and be a card tart for a few years bouncing them around on 0% interest
 
maccapacca said:
How much can you borrow in credit cards?

Can you borrow as much as you can and be a card tart for a few years bouncing them around on 0% interest
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When applying for a mortgage, banks often make it a condition that you must first pay off all your credit card debt.
 
I've got 3 credit cards, owe about 3k on one card(balance transfer, the other two I don't really use and don't have any debt on them, maybe about £60) and have about 9k total credit (including what I owe) if that makes any difference?
 
Borrow the lot then.

70k is what £1125 a month on a repayment mortgage 6 yrs the lot on interest only credit cards would be £1000 a month and you save 10k.
 
Also you're not a sitting tenant

A sitting tenant is a person who rents a property and has a legal right to reside in that property for life.. These tenancies were created before 15 January 1989 under the Rent Act of 1977. Sitting tenants are also referred to as protected tenants, regulated tenants and rent act tenants.[
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Don't think you have any leverage other than the landlord losing a month or two's rent and him paying 1.5% to an estate agent.
 
Raising a deposit isn't really the issue, and I don't intend to raise it from credit cards lol. Not even sure a Mortgage co would accept a credit card as deposit. Seeing as most deposits have to be verified you have the cash, Im sure thy would run a mile during the approval process if you said you were going to raise the deposit by maxing out a bunch of credit cards..

Anyway I'm looking at more a 15-20 year mortgage, my question was more around what the landlord meant by paying the deposit? I will have some extra money from family also which I can add to the down payment.
Also presumably both parties would get their own valuations done and then haggle on the final amount?
Should be in a strong position as I know the house very well and I've got no chain/first time buyer and I already live there so will be a stress free sale from the house owners perspective, so that's gotta be worth some bargaining power?
 
Him paying the deposit probably means he will overvalue the house then reduce it and call this The Deposit which will fit in with your mortgage company, developers do this.

In respect of mortgage / credit cards, if it were me on such a small borrowing I'd be trying to get rid of it sharpish

You could borrow the lot on credit cards and be a card tart paying 3% transfer fees and pay it off in 6 years paying minimal interest

or

Pay a 6 year mortgage paying £10k in interest

or

Go for your 20 year mortgage and pay £45k in interest

For such a small amount I'd be looking to get rid sharpish.

I reckon you may get a shock at what he thinks it's worth.
 
maccapacca said:
I reckon you may get a shock at what he thinks it's worth.
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Well that's what I was asking about valuations and negotiations , I've checked up on the history of house sales on the street on zoopla and also Thier estimate of current value is pretty much in line with what I was thinking.

Also had a good look on right move at similar local property, so i know asking prices so it's down to negotiating down due the convinent sale and some issues I know the property has, obviously with any further issues a valuation might pick up.
 
We did this actually about three years ago.

First of all I would recommend checking out your credit report and paying off any outstanding debt. I owed about £20k on various items of credit and it was made a condition of the mortgage that we paid off this debt. If you have a good credit rating this might not be needed. My credit rating was shocking and we got most of the deposit from family.

I had a number of mortgage companys that I had offers from in principle and we had one come out and give us a valuation of the property (valuation was free if we proceded with mortgage, so was nice to have that money back at the end). The landlord agreed with the valuation and we met up with him. I had lived in the house for about 3 years before we purchased it and I basically said I had paid his mortgage for three years already and that if he wanted to sell this house it would cost him a fair amount of money as it did need some work doing to it (basically needed a new kitchen) before he could really sell it so I was hoping we could come to some arrangement over the price. I told him that we would move out if he didnt sell it to us so he was facing having an empty house (we wanted to buy our own house so would have moved out if we didnt buy this house) I also told him on average it costs something like at least £7k to sell a house when you include everything that you have to pay for. In the end we managed to get a fairly nice discount on the cost of the house and I remember the process after that being quite easy, I just had to have a meeting with the solicitor.
 
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Thanks, that's quite reassuring to know, I owe about 3k on credit cards and if you catch me at the wrong time of month, about £800 on current account overdraft, I'm quite wary about applying for a mortgage due to this. My credit reports with Equifax and Experian seem to be in good shape though, lots of good history bar one or two '1 month late' payments.

I'm not sure how much mortgage companies look at current accounts, one of my credit cards recently said I can transfer @0% my overdraft for 12 months but I'm concerned about falling into the credit card trap.
 
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