Inherited half a house am I still a FTB?

Soundgirlrocks

Hi

My Dad sadly passed away recently and has left his home to my stepmum and I as tenants in common with 50% stake each. He has also left me some money for a deposit as he wanted to see me settled in a home of my own. My question is two-fold, the Will states that my stepmum can live in the house for as long as she wants which I am fine with.

Is there any way to use the value of the house to help secure a higher mortgage (I live in London) I have a shortfall of about £20,000 between what I think the bank will lend ( 4x salary) my deposit and the cost of a basic 2 up 2 down. I can afford the repayments on a higher mortgage, my LTV would be 71%.

Also do I still count as a FTB as I technically own half of my father’s home, although I have never bought before?

Many Thanks in advance

Senior_Paper_Monitor

You are not a first time buyer from a stamp duty exemption point of view.

You will fall within some lender's definition of FTB.

Your main qeustion is more diffcult - there are some possible ways to address this (and being fair to your stepmum) - I really think you need a good broker to work through the detail and options.

issy0503

I think you cant be classed as a f t b, unfortunately, my son in law had the same problem, he inherited property that he rents out and had to declare it when applying for a mortgage

Soundgirlrocks

Thanks for your replies bit gutted about having to pay stamp duty, because I own a half house I can't do much with, hopefully will be able to use it to raise the extra capital I need. Dad bless him thought he had go it all simple and sorted no tax to pay he would be ranting about the tax man getting it off you one way or the other:(

CLAPTON

a mortgage company will access you by affordability (your salary) and the size of the deposit
so sadly although you own half a house it is no value to you and maybe in the short term be an expense

neverdespairgirl

issy0503 wrote: »

I think you cant be classed as a f t b, unfortunately, my son in law had the same problem, he inherited property that he rents out and had to declare it when applying for a mortgage

Inheriting a valuable asset isn't that unfortunate, really. The death that lead to the inheritance is, of course.

purple_haze

If, as you say, your step-mum has been given the right to live in the house, then the house is almost certainly held in trust and you won’t actually attain a beneficial interest until she has died. Even if the house has been transferred into the names of you and your step-mum, you only hold it as trustees for your step-mum while she is alive. So you will qualify for the SDLT first time buyer relief. There is a link to the relevant page of HMRC’s SDLT manual here.


By the same token your reversionary interest won’t help you get a larger mortgage.

Senior_Paper_Monitor

Purple Haze's comment is absolutely valid - I simply took the OPs statement at face value as to the structure (either is perfectly possible) and didn't think it through before responding.

This would also impact (and restrict) on my thought about 'ways to address this' in my original repsonse.

Conrad

It's possible you and your step Mum could apply for a £20,000 secured mortgage, but all would be jointly assessed as her name is on the property deed. I'm guessing you do not live there, so this would need careful thought and consideration as lenders tend to want an applicant present in the asset and not living elsewhere unless it's a buy to let, but a buy to let would likely fail if this property is held in some sort of right to reside trust.

A specialist lender might be the route for this but thier rates will be high.

Soundgirlrocks

Thanks for the repiles. As far as I'm aware no trust has been set up, we are sorting out probate at the moment with the solicitor. My Stepmum and I are named as executors of the will, but as I live in London and my step mum is in the north east she has been doing most of the paper work.

getmore4less

One option is for the stepmum to buy you out in part or full or if she has the cash lend/gift you the money


What are her plans for her share of the house when she dies?

Does she actualy want to live there for life.