A concessionary purchase is a great way for you to get on the property ladder, even if you don’t have enough money to save for a mortgage deposit.
What is a concessionary mortgage purchase mortgage?
Concessionary purchasing is the term that describes the purchase of a house at less than its market value. It’s also known as a purchase below market value (BMV). Concessionary mortgages are mortgages used to purchase property below market value. This concessionary purchase occurs often between relatives, although not always.
As we will show below, there are many types of concessionary mortgages.
Concessionary mortgages for parents/family
Parents are aware of the financial and emotional difficulties that their children face today in property markets. Many parents wish to help and Family Concessionary Purchases allow them to do just that.
Landlord concessionary Mortgages
Many landlords offer concessionary mortgages. This lowers monthly payments and lengthens the loan term. This can help tenants buy a home without paying top dollar. A concessionary mortgage comes with a few stipulations. Make sure you can afford the mortgage terms and payments.
Employers may offer property concessions
Employers can sell the property to employees for less than market value. To avoid any dispute about the ownership, the seller must acknowledge any discount received is a gift with no conditions. This is done through a waiver.
Developer discount on purchase
Developers might offer buyers a concessionary discount (also known as a “developer discount”) on the market price of their property. However, it is often more difficult to find a lender that will lend a mortgage on these properties, particularly if they are new.
Concessionary purchases discounts on the open markets
A discount can be offered by sellers on the open market to buyers as well. This is less common and harder to find lenders willing to lend in these cases. Lenders will need to be able to explain why they are offering a discount.
How to obtain a concessionary purchase mortgage
While the process is very similar to a regular mortgage application, you can expect the loan officer to be more thorough about the property’s value. They will also ask why you are purchasing it below the market value.
While you will need to get your mortgage application approved you also want to get the best deal. This is why it is so important to consult professionals before you rush to do anything. Concessionary purchase brokers can help you find the best lenders and offer advice on how to get them.
How can you choose the best concessionary mortgage lender
The best way to choose a lender is through a broker that has access to all of the UK’s concessionary mortgage lenders. Many homeowners have been helped by our services with mortgages below the market value.
The rates for concessionary mortgage deals are typically the same as those for standard purchases. The usual factors that affect mortgage rates are your credit history, type of property purchased, length of your mortgage term and amount of mortgage applied for.
A good broker will be able to help you find the best deal based on your particular circumstances from all the concessionary buy mortgage lenders that might consider you.
Before applying mortgage for a concessionary purchase, an adviser should explain everything to you.
We work with brokers who are knowledgeable and can tell you how much deposit each Concessionary Mortgage provider requires. If you decide to proceed, they will connect you with the best lender.