Mortgage on recently inherited property

Frozen_up_north

In a few days time I will inherit a property for which I already have an interested buyer. However, when they asked about a mortgage from their bank, they were told because the house hasn't been owned for more than 6 months they were not able to offer a mortgage on it.

The Law Society have a list of warning signs covering money laundering and the first item on the list is a property owned for less than 6 months.

However, common sense should come into play here as there must be countless thousands of cases where a property is inherited then put on the market.

The bank in question was Lloyds TSB, but maybe the potential purchaser didn't explain the circumstances, or is it that some banks/building societies are "jobsworths" and really don't want to lend in the first place?

Any hints or tips? Other than to ask the potential buyer to shop around? They are only needing a mortgage for about 40% of the value, so the risk to the lender is quite low.

pmlindyloo

A quick google suggested that this is correct.

However, I believe that there are lenders who will accommodate this after, perhaps, an investigation.

I am not an expert so I suggest you repost (copy and paste?) your query on the Mortgage forum.

I know there are some independent mortgage advisors on there who post and might be able to point you in the right direction.

DVardysShadow

The best thing to do is not to inherit the property, but let the executors sell it and inherit the proceeds.

Frozen_up_north

Does the same problem not arise if the executor sells the property? I assume the deceased cannot sell the property, so the ownership will have to transfer to someone else first.

I bet it's not an issue when a lender repossesses a property and then sells it!

RAS

If the executor sells the property, then it is still owned and registered on the Land Registry in the name of the deceased, who probably lived there more than 6 months?

Frozen_up_north

I'll ask my solicitor if there are any problems with simply letting the existing name stay on the Land Registry and doing just the one transfer.

Thanks for the suggestion.

DVardysShadow

Frozen_up_north wrote: »

Does the same problem not arise if the executor sells the property? I assume the deceased cannot sell the property, so the ownership will have to transfer to someone else first.

I bet it's not an issue when a lender repossesses a property and then sells it!

The executors would be acting in the name of the deceased. As I see it, the buyer probably has not explained the situation adequately to the lender - equally, it seems that you have not thought this through. Unless there is an overriding reason for the property to be transferred to you before selling on, there is n point in doing a double transfer,

G_M

Additionally there are costs incurred in transferring to you.

Only for you to sell and incur more costs!

No reason not to leave it in the name of the deceased, and sell to the buyer you have found. A copy of the will and/or the Executer's authority is all that is needed.