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    • MoonShade
    • By MoonShade 12th Sep 17, 8:05 PM
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    MoonShade
    Inherited mortgage shared with sibling
    • #1
    • 12th Sep 17, 8:05 PM
    Inherited mortgage shared with sibling 12th Sep 17 at 8:05 PM
    Hi all. My mom passed away a few months ago. The mortgage hasn't been fully paid off. Myself and my three other siblings inherited the house. Two want to take their share and leave the home. But myself and my other sibling thought it would be a good idea to keep it. I live elsewhere (as I was older and live away from home.) My sibling who is staying there wishes to take over the mortgage, but my name will be on there also. So if he doesn't end up paying the mortgage, I'll be liable.

    I'm a bit nervous as I don't want my credit to be ruined if he cannot pay the mortgage and the house gets repossessed. I know I won't be able to afford both the mortgage and my own home, so I wouldn't be able to take over payments. He is confidant and has a job, but he is young and reckless and recently his behaviour has concerned me..

    I think the best idea is for us to rent out the house (it's a four bedroom home and it seems silly for just one person to live there) but he isn't keen and wants to stay there himself.

    I think this is a good oppurtunity, but I just don't know if I'm making a wise decision.

    Any advice?
Page 1
    • mrginge
    • By mrginge 12th Sep 17, 8:15 PM
    • 4,133 Posts
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    mrginge
    • #2
    • 12th Sep 17, 8:15 PM
    • #2
    • 12th Sep 17, 8:15 PM
    Sell it and let him buy his own house.
    • Edi81
    • By Edi81 12th Sep 17, 8:21 PM
    • 274 Posts
    • 161 Thanks
    Edi81
    • #3
    • 12th Sep 17, 8:21 PM
    • #3
    • 12th Sep 17, 8:21 PM
    If you know that you can't afford both this house and your own then getting a mortgage is unlikely.

    If you don't can't see a way forward the house will need to be sold. The current lender will want their money back now that your mum has passed away.

    There are countless examples on here of family relations going bad when money comes into it. Think carefully before doing anything.
    • getmore4less
    • By getmore4less 12th Sep 17, 9:23 PM
    • 29,817 Posts
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    getmore4less
    • #4
    • 12th Sep 17, 9:23 PM
    • #4
    • 12th Sep 17, 9:23 PM
    You can't inherit a mortgage you will need a new one.

    How are you thinking you will share/own the house?

    will they be paying rent for your share or can you put a lodger in to pay for it

    You need enough for the mortgage and to buy out the others.
    • MoonShade
    • By MoonShade 12th Sep 17, 9:29 PM
    • 3 Posts
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    MoonShade
    • #5
    • 12th Sep 17, 9:29 PM
    • #5
    • 12th Sep 17, 9:29 PM
    He pays for it as he lives there. I would like to rent it personally but he doesn't want to.
    • getmore4less
    • By getmore4less 12th Sep 17, 10:45 PM
    • 29,817 Posts
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    getmore4less
    • #6
    • 12th Sep 17, 10:45 PM
    • #6
    • 12th Sep 17, 10:45 PM
    Why are you even considering being part of this?
    • Jenniefour
    • By Jenniefour 13th Sep 17, 1:37 AM
    • 1,125 Posts
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    Jenniefour
    • #7
    • 13th Sep 17, 1:37 AM
    • #7
    • 13th Sep 17, 1:37 AM
    OP, both ideas you're considering are simply not possible, you cannot just take over the mortgage. And you cannot ride roughshod over the wishes of the other two siblings who want to leave and receive their money - to which they are fully entitled. The house needs to be sold so everyone gets their proper share of the inheritance.

    Has the mortgage lender been informed of your mother's death? If not, that needs to be done. They will allow time for the house to be sold and, meantime, no-one should be making any further mortgage payments. What remains will be paid off with the sale proceeds.
    • Edi81
    • By Edi81 13th Sep 17, 7:07 AM
    • 274 Posts
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    Edi81
    • #8
    • 13th Sep 17, 7:07 AM
    • #8
    • 13th Sep 17, 7:07 AM
    As Jennie says. The lender needs to be informed of your mother dying.

    You have not inherited a mortgage. You have inherited a quarter share in a house that is encumbered by a mortgage. These are separate things. I would sugggest that you seek legal advice on this as you do not have agreement with your siblings on what should happen to the house.

    What about the rest of the estate? Any savings, shares etc? Is there a will?
    • worried jim
    • By worried jim 13th Sep 17, 7:23 AM
    • 8,551 Posts
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    worried jim
    • #9
    • 13th Sep 17, 7:23 AM
    • #9
    • 13th Sep 17, 7:23 AM
    Get it sold. Get the estate divided into four (if that was your Mum's will) and move on. Keep it simple and business like and do it quickly. Your younger sibling's scheme is a none starter unless they can obtain their own mortgage for the full retail value and then buy the two thirds out- which they can't and you absolutely should not do as this will end in tears when they stop paying you the full market rent and you have mortgage areas and your credit is trashed and you lose your house and your family argues and splits for 50 years. This site is full of these stories. Sadly.
    "Only two things are infinite-the universe and human stupidity, and I'm not so sure about the universe"
    Albert Einstein
    • MoonShade
    • By MoonShade 13th Sep 17, 7:24 AM
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    MoonShade
    Jennie etc: The bank have been informed and we can take over the mortgage. My other two siblings are still taking their share. Just myself and my brother are taking over the home.
    • Edi81
    • By Edi81 13th Sep 17, 7:31 AM
    • 274 Posts
    • 161 Thanks
    Edi81
    Okay. So the bank have said that you and one brother can have a new mortgage in your names.
    What's the problem? The fact you and this brother can't agree on renting it out or him staying.

    Sounds as though you have doubts. If this sours it could go awfully wrong.
    • getmore4less
    • By getmore4less 13th Sep 17, 7:35 AM
    • 29,817 Posts
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    getmore4less
    Jennie etc: The bank have been informed and we can take over the mortgage. My other two siblings are still taking their share. Just myself and my brother are taking over the home.
    Originally posted by MoonShade
    How are you paying their other siblings shares

    Has the bank gone through the application process yet

    How will you own the house if you have him paying the mortgage does he own more, who is responsible for maintenance, can he make changes without your agreement...

    It will not be your main residence that will potentially involve future CGT issues...


    if you have another house mortgage it will impact changes to that and if you don't when you come to buy that's you stuck with the 3% extra SDLT
    • csgohan4
    • By csgohan4 13th Sep 17, 9:32 AM
    • 3,777 Posts
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    csgohan4
    Money and family should never mix , how much is your family worth ?
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • Brock_and_Roll
    • By Brock_and_Roll 13th Sep 17, 9:40 AM
    • 756 Posts
    • 726 Thanks
    Brock_and_Roll
    <I>Jennie etc: The bank have been informed and we can take over the mortgage. My other two siblings are still taking their share. Just myself and my brother are taking over the home. </i>


    That is almost certainly a mis-understanding. What the bank means is that, subject to qualification & approval, they would be happy for the relatives to have a mortgage on the property.


    Legally, the Executor has a duty to realise the assets of the estate and to settle the debts. A dead person cannot have a mortgage - so legally it will need to be repaid from the assets of the estate - this could be via a sale to the relatives with a new mortgage advance from the existing bank.


    I have to say that this happened to me after the death of my own father - legally things can get very, very complicated indeed - and I am a banker! I would strongly advise a clean break here.


    With regards to the sale of the property I managed to persuade the bank to hold fire for 18 months whilst various legal issues, disputes etc were resolved - but this took a lot of persuading on my part!
    • Jenniefour
    • By Jenniefour 13th Sep 17, 11:24 AM
    • 1,125 Posts
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    Jenniefour
    As has been said, I think what the bank means is that you can have a mortgage if you and your brother pass the affordability criteria. Check with them. If you decide to let out the house you would need to get a BTL mortgage, not a residential mortgage. Which has it's own different lending criteria. Best to get back to the bank and ask them to explain properly what they require in both scenario's.

    What you both need to consider is the much longer term. For example, are you happy with, effectively, not being able to benefit from your inheritance for a long time if you agree that your brother lives there? How long can he live there? Do you want to have the anxiety about whether he would keep up mortgage payments? Who pays for repairs? What if you decide you would like your share of the money at some point? Would your brother be happy to sell, or would he be able to afford to buy you out? What happens if he were to refuse to leave?

    If you let the house then you need to become familiar with the responsibilities of being a landlord, read G_M's guide's. Including paying tax. Keeping up with repairs etc. This option still has risks attached e.g. tenant not paying rent and it would then take about six months to get them out through the courts. That might work as an investment for the future if your brother agrees and moves out. In any event you would still need to have a clear agreement between you about selling the house if one of you wants the money instead, without one of you needing to force a sale through the courts - which is expensive. Sounds like you and your brother want different outcomes from the outset. That does not bode well for the future, including your relationship with each other. My advice, based on the fact that you already have two different agendas, would be to sell up.
    Last edited by Jenniefour; 13-09-2017 at 12:52 PM.
    • csgohan4
    • By csgohan4 13th Sep 17, 12:42 PM
    • 3,777 Posts
    • 2,359 Thanks
    csgohan4
    Renting out a property no longer is profitable for everyone, do you know the tax incentives are reducing soon? the legal and other tax implications?


    Renting out is not a quick rich scheme
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • Wookey
    • By Wookey 13th Sep 17, 3:39 PM
    • 800 Posts
    • 401 Thanks
    Wookey
    Get a deal done with your siblings, you either all agree to rent it out, sell it, or sell it whereby one of you buys out the rest, for the last option you could agree a small discount to make things run smoother between you's. I would ask the solicitor dealing with this to incorporate this as part of his winding up of the estate. I would not go joint mortgage with a brother or sister on a mortgage as you have no clue as to what would happen in there personal life with regard to separation/divorce/death in the years ahead and subsequent claims that could arise due to court settlements. If they want to continue to live there thats fine but they need to buy out the rest of the people who have a share.
    Norn Iron Club member No 353
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