Using equity for a mortgage

NearOn

Hi

Im new to the forum, will post in newbies too, just wanted to ask something, apologies if this has been asked before, did a search but nothing came up matching it.

Basically my wife in the future is due to inherit 50% of her grandfathers property. However the property is in a trust and can not be sold whilst her mother is alive. The house has no outstanding mortgage and is fully paid off. Me and the wife were wondering if we could use the 50% equity she will own in the house to get a mortgage on our own house?

Many Thanks

PasturesNew

The plan is flawed on many levels. Morally it's like stealing from her. If you two split up, there's the chance it could get very messy.... and if one of you becomes too ill to work or loses their job, then again it could get very messy. Bottom line is: the safe and secure mother, whose husband spent a lifetime ensuring his family were well looked after after his death, could end up having her house repossessed.

It's really somewhere you don't want to go to. Really, put it out of your mind.

Practically, I'd be surprised if the equity in the house could be released, because of the potential pitfalls.

Having said all of the above: I actually have no idea what I'm talking about.



Let those who know now have their tuppence-worth.

BitterAndTwisted

Is there a reason why you and your wife are unable to save a deposit for a mortgage on your own?

Emmzi

1. the insurance lapses and the house burns down
2. neighbours from hell move in next door and value drops to 50p

just 2 of the reasons your lender will not go for this.

Blacksheep1979

Emmzi wrote: »

1. the insurance lapses and the house burns down
2. neighbours from hell move in next door and value drops to 50p

just 2 of the reasons your lender will not go for this.

That can happen when you buy a house with a cash deposit though...

ViolaLass

I would have thought a lender wouldn't like this because they can't repossess half a house.

getmore4less

NearOn wrote: »

Hi

Im new to the forum, will post in newbies too, just wanted to ask something, apologies if this has been asked before, did a search but nothing came up matching it.

Basically my wife in the future is due to inherit 50% of her grandfathers property. However the property is in a trust and can not be sold whilst her mother is alive. The house has no outstanding mortgage and is fully paid off. Me and the wife were wondering if we could use the 50% equity she will own in the house to get a mortgage on our own house?

Many Thanks

To use the equity on this house you need a debt secured on that house and then the cash released from the trust to you and used as cash deposit on the place you want.

What are the terms of the trust, who are the trusties you need to talk to them.

Emmzi

Blacksheep1979 wrote: »

That can happen when you buy a house with a cash deposit though...

yes, yes it can. but the loss is smaller because the deposit was paid in cash so was never theoretical.

NearOn

PasturesNew wrote: »

The plan is flawed on many levels. Morally it's like stealing from her. If you two split up, there's the chance it could get very messy.... and if one of you becomes too ill to work or loses their job, then again it could get very messy. Bottom line is: the safe and secure mother, whose husband spent a lifetime ensuring his family were well looked after after his death, could end up having her house repossessed.

It's really somewhere you don't want to go to. Really, put it out of your mind.

Practically, I'd be surprised if the equity in the house could be released, because of the potential pitfalls.

Having said all of the above: I actually have no idea what I'm talking about.



Let those who know now have their tuppence-worth.

Am glad you are not a expert :-), Her grandfather is on his own, so when the time comes, the house will go to my wife and her mother. My wife's grandmother passed away years ago.

Secondly, I am asking this on behalf of me and my wife, as we would not be asking if we had other options. We are not in a position to save for a deposit currently.

I am not sure on the exact terms of the trust, was set up between my wife, her mum and my wife's grandfather, the owner of the house. But my wife was young at the time so doesnt know every detail, mainly that she will own 50% of the property.

All I know is whilst my wife's mother is alive, the house can not be sold. Is held in the trust. Can I point out, we are just exploring other avenues like this out of interest, as like I said currently we cant afford to save for a deposit.

ViolaLass

If the house can't be sold while your MIL is alive, then how would the bank recover their money (if you defaulted on your mortgage and they had to repossess their half of the house)?

BitterAndTwisted

If you can't manage to save up a deposit between the two of you what makes you think you can afford to pay a mortgage and all of the other expenses being a home-owner entails?