Inherited property & first time mortgage

marina2011

This is the first time I am posting so I hope I am doing it correctly!

My Aunt passed away and left me her flat. There is no mortgage on the property. I am in full-time employment living with my mother and the flat is too far for me to live in. I would like to buy my own flat near to my work and rent my Aunt's one out as my mother may possibly want to live in it in the future.

Would I be able to get a mortgage on the strength of owning the flat? It is worth approximately £150,000 but is in need to renovation. I do not have any cash savings for a deposit on a new flat, but have got shares / ISAs to the value of around £20,000. I owe about £5,000 on my credit card and have a loan with my bank and currently owe them £19,000. What type and amount of mortgage could I expect to be offered?

I have no idea about mortgages and where to get independent advise about them. If I were to get a mortgage could I let the property or would I have to get a buy to let mortgage.

Any help offered would be greatly appreciated. Many thanks.

Senior_Paper_Monitor

The obvious way would be to mortgage the property you own as a 'buy to let' (only real problem is that as first time owner, landlord there are only lenders who will accept you) at a level that provides a good deposit (thereby getting you good rates) and other expenses in setting up home in the new property, while leaving you good income from the rental over and above the new mortgage.

One of the other benefits of placing the borrowing is the tax relief that will apply against the rental.

You would then select a property on the basis of the deposit and your income.

All of this is dependent upon ensuring that your (and possibly your mum's) overall financial position is appropriate

Thrugelmir

marina2011 wrote: »

I owe about £5,000 on my credit card and have a loan with my bank and currently owe them £19,000.

Suggest you cash in the property and use the released funds to clear your debts. The remainder can then be used as a sizable deposit on a property that you make your home. Better to be safe than take a speculative punt and lose a lot of what you've inherited.

Senior_Paper_Monitor

I agree with Thrugelmir's general point - but there are similar investments held (whther maintaining both is sensible is another argument) - and that was what I was referring to with ....

"All of this is dependent upon ensuring that your (and possibly your mum's) overall financial position is appropriate"

.... in short this is an excellent opportunity for the OP to review her overall financial position and strategy (and take professional advice).