Where do I go from here?

Andy<3Beth

Ok, this may get a little long winded and I may witter on a little but please bear with me as any advice would be brilliant.
My father recentley passed away and in his will has "left" his house to me, on the condition that I sell my current property within 2 years and pay my 3 siblings £25,000 each from any profit made. Problem is I currently have approximately £15,000 outstanding on my current mortgage and around £8,000 "debt". I have not had my property valued as yet, but houses in the area sell from £70,000 upto £110,000, so at rock bottom I am not going to have enough to "pay" them. I really do not want to sell my fathers property, as it is bigger than mine and would like to move in there however, as you'll imagine it's gonna need a lot of renovating and has lots of scope to even extend, I just have absolutely no idea when it comes to mortgaging property. Do I take part of my house profit as deposit for a bigger mortgage, I think I'm going to need at least £60,000 to get the house up to scratch to live in, new central heating throughout, extend/remodel the kitchen, and bathroom add a garage, landscape the gardens that kind of thing. I know it sounds straightforward but my heads a mess not knowing how I should go about financing it.
Thanks in anticipation

Thrugelmir

The starting point is the amount of money you need to raise to pay your siblings and renovate the house.

Could you afford this as a mortgage?

Possibly your better option is to sell your late fathers house and sort out all the finance issues first. From there plan for the future.

Andy<3Beth

Thrugelmir wrote: »

The starting point is the amount of money you need to raise to pay your siblings and renovate the house.

Could you afford this as a mortgage?

Possibly your better option is to sell your late fathers house and sort out all the finance issues first. From there plan for the future.

Thanks, but this is not an option we will be moving into the house. I suppose the question is will I be able to mortgage this property, although I'm not "buying" it?

hcb42

you would appear to have about £50K in equity on your house then.

Sell it, and get a mortgage for £25K or whatever the minimum is nowadays, and pay off the third sibling.

Make sure you price yours competitively to sell, so your siblings are not waiting for years on end while you have the benefit of the house..

Andy<3Beth

Andy<3Beth wrote: »

, I think I'm going to need at least £60,000 to get the house up to scratch to live in, new central heating throughout, extend/remodel the kitchen, and bathroom add a garage, landscape the gardens that kind of thing. I know it sounds straightforward but my heads a mess not knowing how I should go about financing it.
Thanks in anticipation

I'm going to have to renovate the whole house

Thrugelmir

Andy<3Beth wrote: »

Thanks, but this is not an option we will be moving into the house. I suppose the question is will I be able to mortgage this property, although I'm not "buying" it?

You'll need to own the property for 6 months in order to remortgage it.

holly_hobby

The 6 mth period isn't a legal requirement or a hard and fast rule, and not all lenders strictly operate it, where it can be evidenced that the app is not in connection with a back to back exercise or similar arrangement.

Ok, the terms of the will are that you need to find 75k within 2 yrs of your bequest, in order for the administrator/executor to fully settle the terms of Dads will - which is you get the house, for the trade off of selling your own and providing your siblings with 25k each (from whatever source I would imagine - although the obvious is to use the free equity from your own house sale).

This can be from the sale of your property, plus the addition of other capital you have (to satisfy the figs cited in the will).

A formula could be ....

You sell you house now (move into Dads, leaving the remodelling until later - as you must accept (from the anticipated sale price of your own), that you can't do everything at once !.

You split the free equity realised on sale 3 ways - with any residual amount o/s in respect of the 25k bequest, being paid from additional capital, within the remaining term of the cited 2 yr window.

You then subsequently remortage Dads house to release equity (which may incur a 6 mth wait, but will depend on lender), to both settle the os bequests to your siblings, and finance the required refurb (or as much of the costs that can be released based on the details of the application).

Its a remortgage on Dads house, as you will already be the legal owner, however as it will be mortgage free (unencumbered), you won't qualify for any fee legals on a fee free remortgage deal. Further to which, obv the property will have to value up satisfactorily, and your income, status and purpose of remortgage, shall all have to be acceptable to the lender to support the equity release request itself.

OR

You sell your house now .... you use the free equity to remodel Dads, within 2 yrs you then remortgage and release 75k (or less if you have additional capital to hand, and again subject to you satisfying the lenders status and criteria requirements) to settle your Siblings bequests.

So 2 different possible solutions .... of course if your property takes a while to sell, tinkering either plan may be required ! And of course, it must be stressed that the mge application on Dads (now your inherited property), is all dependant upon you satisfying the lenders criteria requirements - which may or not be the case, and may or may not scupper any future equity release exercise.

Hope this helps

Holly

Conrad

Remortgage your existing home. Be careful about 'the purpose' you state on the remo application - check what purposes your existing lender allows. Something like 'raising capital to renovate a second property' might be ok.

Then once new place is ready, move in, sell the old one, and use new property to raise capital to repay your siblings. Check the will can allow this procedure.

Otherwise simply sell existing one, move into to new one and raise a mortgage on it, as long as it is mortgageable / habitable. You'll need to be on the voters roll at new place prior to raising this mortgage I would imagine.

Wh05apk

You could also discuss this with your siblings, see what they will accept, maybe they will allow you extra time to do the work, and remortgage later. Provided all beneficiaries agree, the terms of the will can be varied.

ILW

Andy<3Beth wrote: »

I'm going to have to renovate the whole house

Why not just sell as is?
Unlikely that a renovation will add much value over and above the cost.

Andy<3Beth

Thanks for all the advice, still none the wiser mind, I'm going to have my house valued at the weekend and at least then I'll have a "ball park" figure.