inherited house mortgage advice

twelvegoldbars

hi there,im 1 of 3 brothers who have inherited our mums house who sadly passed away in feb this year,the house has no mortgage on it,but is in need of modernisation,i myself am a builder and maintenance manager,older brother 2 is a ware house manager for a supermarket,younger brother 3 works for a wholesale company,my earnings are 20k a year,brother 2 earns 21k a year,brother 3 earns about 14k a year,we need to raise 25k to modernise the property just for matirials,(no outside trade needed as i do everything in my normal job)and other 2 brothers supply more labour,we are in the process of accessing our credit reports from experian to present to a mortgage adviser,my report has come back ok i think,("good" 917 points),with all green blobs with zero missed payments,my accounts i have is for virgin media,and 02 mobile phone account,no other credit ,i.e credit cards or anything,im on the electoral register,my older brother hasnt had his yet,but i know his debt is about 15k and is being paid via a debt management company,he is on electroral register,how ever my younger brother is in debt to about 13k and not doing very well!,when we get our reports we are going to see the adviser,and see how things stand,we are hoping to make a business and maybee do this property up to sell and move onto another,we were told that a buy to let mortgage is best to raise the 25k to modernise our house,im looking for options as to what to do/how to raise the funds,before we go to the adviser so that we get an idea of what to expect ,so any help will be gratefull !:)also the house as it stands is worth 145k,modernised 210k

GMS

twelvegoldbars wrote: »

hi there,im 1 of 3 brothers who have inherited our mums house who sadly passed away in feb this year,the house has no mortgage on it,but is in need of modernisation,i myself am a builder and maintenance manager,older brother 2 is a ware house manager for a supermarket,younger brother 3 works for a wholesale company,my earnings are 20k a year,brother 2 earns 21k a year,brother 3 earns about 14k a year,we need to raise 25k to modernise the property just for matirials,(no outside trade needed as i do everything in my normal job)and other 2 brothers supply more labour,we are in the process of accessing our credit reports from experian to present to a mortgage adviser,my report has come back ok i think,("good" 917 points),with all green blobs with zero missed payments,my accounts i have is for virgin media,and 02 mobile phone account,no other credit ,i.e credit cards or anything,im on the electoral register,my older brother hasnt had his yet,but i know his debt is about 15k and is being paid via a debt management company,he is on electroral register,how ever my younger brother is in debt to about 13k and not doing very well!,when we get our reports we are going to see the adviser,and see how things stand,we are hoping to make a business and maybee do this property up to sell and move onto another,we were told that a buy to let mortgage is best to raise the 25k to modernise our house,im looking for options as to what to do/how to raise the funds,before we go to the adviser so that we get an idea of what to expect ,so any help will be gratefull !:)also the house as it stands is worth 145k,modernised 210k

A buy to let mortgage with credit issues will be very difficult. Broker will know how to proceed.

twelvegoldbars

GMS wrote: »

A buy to let mortgage with credit issues will be very difficult. Broker will know how to proceed.

thanx for reply gms,any idea as to what options would be available?

GMS

Plenty based on the figures but may not be at great rates.

If the numbers are true you should be able to secure an offer of finance within 24 hours.

Equity is on your side as is the fact that you want to develop into a business

DVardysShadow

Are you good for the 25k in your own name? It strikes me that it might possibly have less issues for you to get a secured loan to cover it than the 3 of you getting mortgage?

If you go down this road, adjustments will need to be made on ownership or on the split of profits afterwards.

Regardless of mortgage or secured loan, how are you planning to service this debt before you sell on? It strikes me that the other 2 may not be in a position to fund their share of the materials?

Wh05apk

What are your long term plans for the property? Are you simply doing up to sell? If so a secured, or even unsecured loan may be better, a btl mortgage will have penalties, and is there for the long term to rent the property.

If you go btl route, you will be severely limited because of your incomes, possibly only aldermore or tmw if you are lucky.

twelvegoldbars

thanks for the reply guys,i have to go work ,but will put in the answers to your questions around dinner time today,a quick answer to one of the questions about servicing the loan,possibly an interest only mortgage,get the house modernised over 1 year ,sell,then repay the 25k back from house proceeds

DVardysShadow

twelvegoldbars wrote: »

thanks for the reply guys,i have to go work ,but will put in the answers to your questions around dinner time today, a quick answer to one of the questions about servicing the loan,possibly an interest only mortgage,get the house modernised over 1 year ,sell,then repay the 25k back from house proceeds

Yes, interest only mortgage. 'How will you service the loan?' means how will you pay the interest?

As I look at this, your brother on a Debt Management Plan will be breaking the terms of his plan to contribute and it looks like your other brother won't be able to either.

Dave_Ham

You need advice. Aside from the fact that is not clear if any of you have owned a property before, you need to know how deep your Brothers are in with their debts.

If the house/inheritance is appropriately declared it may change the balance of the DMP - depending who knows what you may find that also changes your plans.

I would have thought, raise the money quickly, do up quickly, sell on quickly and then quickly help your Brothers to pay back their debts and then support them going forward without debt.

All the best

DVardysShadow

Dave is right, the inheritance itself could cause problems for the DMP.

Thinking on this some more, has the house been passed on from the executors to the inheritors yet? And is there any money in the estate to be inherited?

I think I would be inclined to leave the house in the estate and use the estate money to do it up if this was possible. It would probably cause less problems to the brother in a DMP to do this.

Frozen_up_north

I am just about to inherit some property as part of a will and have a buyer already lined up, however when they went to see a mortgage advisor at their bank, he said because the property hasn't been owned by me for more than 6 months they couldn't offer a mortgage on it! It might be a misunderstanding if they said I didn't actually own the property at the time they asked, but I suggested they try elsewhere...

Is this a common problem as it must happen regularly with inherited property, to me it sounds like the bank weren't interested and just found an excuse not to lend. They are only asking for about 40% of the house value for a mortgage.

Anyone else suffer from this "jobsworth" approach to buying property recently inherited?