It’s becoming increasingly common for family to sell to other family members at a discounted price; this is called a concessionary purchase.
You can save thousands of pounds by family members selling their property at a reduced rate below the market value. Not only is the purchase price a great win, but requiring a lower mortgage deposit and lower total mortgage, it leads to more affordable monthly payments. It’s a great way to help family get on the property ladder when they need that little bit of extra assistance.
Landlords also occasionally choose to sell their property to long-term tenants for a discounted price – again, less than its market value. This helps to avoid the stress and hassle of putting the property on the open market when they're ready to cash in on their investment. Plus, they can save thousands on estate agent fees as it would be a private sale.
Mortgage terms and interest rates for concessionary purchases are usually similar to standard mortgages. Your mortgage advisor will take into account the normal factors such as your income, credit history and personal circumstances, and, as usual, they'll affect which lenders you can go to, but the bottom line is not all lenders accept concessionary purchases.
Concessionary purchases often mean that, as a borrower, you can tick all the boxes, but sadly, your situation doesn’t. On the surface, this doesn’t look like a problem, but if you have to go to multiple lenders it can lead to multiple credit checks that will bring down your overall credit score, in turn limiting the available lenders even further. It's vital to get the right lender first time, and that's where an experienced, specialist mortgage advisor can help.
At CLS Money, we help you find the concessionary purchase mortgage lender who will take your discounted purchase price into consideration and underwrite your agreement accordingly – eliminating the possibility of a tarnished credit score. Your discounted property price isn't the only area where you'll save money. With the right financial advice and concessionary mortgages to hand, you stand a great chance of tracking down your perfect deal – thanks to your family members and your mortgage advisor here at CLS.
Our advisors will find you the right mortgage lenders for you and your below market value purchase, the right deal, and manage the entire application process from start to finish, leaving you to look forward to receiving the keys to your brand-new home!