Inherited A Property but...

steveeo

holly_hobby wrote: »

Unfortunately the rights of creditor and legal responsibility of the executor will over rule any formal will bequest.

Your OPs grandfather wanted his property to go to her, but made no provision for the repayment of the debt on it.

He has died.

The mge lender wants their money, and the executor has a legal duty to pay them (and all creditors/HMRC) BEFORE legal ownership and formal transfer of the property and other assets can be completed (assuming all other liabilities have been provided for from capital of the estate) ... if there isn't sufficient free capital to repay, the sale of assets will be reqd, which may equate to sale of the house and proceeds not only repaying the mge but other debts too.

The bottom line is, if the decds estate has debts, they must be wholly repaid/provision made, by the administrator from the estate, before any dividing up of bequests can be administered (be that from capital, or disposal of assets) regardless of how or where the decd wanted his bits and pieces to go - end of.

Indeed I've seen cases were the estate was all but wiped out for beneficiaries, where the decd had effected a will, but no provision for os debts and IHT liability - they recd the residue after the sale of the properties (of which they were the beneficiaries), which wasn't much at all.

So although Grandad wanted GDaughter to inherit the house and make it her home, the reality of it transpiring is dependant upon several factors I'm afraid.

You'll understand more when you speak to your Probate solicitor.

With regards to possible tsf of mge under inheritance and if permissible from the lender (which it may not be as not all consider this), this can only be possible if it has been established that the estate is able to satisfy other debts from other available capital/assets.

You need to establish what the details of probate are from the executor, such as ...

• what the total estate debts are (secured, unsecured, inc utilities, funeral costs, admin/legal costs) ?
• what the total valuation of the estate is ?
• will that all be covered by liquid assets (ie bank deposits, life assurance, os pension payments, etc) ?
• if there is a shortfall, what assets will be sold to meet the reqd amount ?

Hope this helps

Holly

Thanks again Holly, looking around the internet I think there is no other way but to sell the house and pay the debts which is a real shame but we will see what happens next week.

steveeo

antrobus wrote: »

If that was the case, then yes the house would have to be sold, and the specific beneficiary would (I'd guess) get everything.

Because the will states about my wife getting the house, once this is sold does that mean she has lost everything and whats left on the estate will be split with other family members or would she still get whats left from the sale of the house?

Thanks

getmore4less

holly_hobby wrote: »

The OP can't raise funds against property on a mortgage (to repay the existing mortgageee) until they are the legal owner - beneficial ownership doesn't wash for mortgages, they must be on the deeds.

Thats clearly rubbish or no one could buy a house(if they needed a mortgage).

The ownership and raising the mortgage happen at the same time as it would for any house purchase, they are just buying from the estate just as what would happen if the estate had to sell to someone that needed a mortgage.

JimmyTheWig

steveeo wrote: »

Thanks again Holly, looking around the internet I think there is no other way but to sell the house and pay the debts which is a real shame but we will see what happens next week.

Did anyone have any thoughts on my post here:

JimmyTheWig wrote: »

Would it be possible to buy the RTB with a mortgage secured on the RTB above the purchase price?
I.e. what value would the mortgage company use for LTV purposes on a RTB? If they are getting a 45% discount it would seem crazy for the mortgage company to use the purchase price as the value - this isn't the same as a vendor taking the best offer they get on the open market.

So I'm wondering if the equity created in the RTB from the discount could be used to pay the debts? Then it could all be done in the right order. (Depending, of course, on how long it takes for a RTB to go through and how "poor" the credit history is.)

Would this be a way to save the grandfathers house?

steveeo

getmore4less wrote: »

Thats clearly rubbish or no one could buy a house.

The ownership and raising the mortgage happen at the same time as it would for any house purchase, they are just buying from the estate just as what would happen if the estate had to sell to someone that needed a mortgage.

Thanks, this is looking like the direction to follow because who ever buys the house well it would be the same process as if we buy it, just the estate will allow the sale to us to meet the needs of the debts on the estate,which is a very low % of the property value.

It made us feel better reading they way you have worded it.

JimmyTheWig

steveeo wrote: »

Thanks, this is looking like the direction to follow because who ever buys the house well it would be the same process as if we buy it, just the estate will allow the sale to us to meet the needs of the debts on the estate,which is a very low % of the property value.

It made us feel better reading they way you have worded it.

But would this not mean you would need a mortgage for pretty much 100% of the price you are paying for it?

steveeo

JimmyTheWig wrote: »

Did anyone have any thoughts on my post here:


Would this be a way to save the grandfathers house?

Jimmy, we are looking into this but I have a feeling that a lot of people on MSE would take it that this would be done for the wrong reasons, our own benefit and profits, I have lots of posts on the RTB on here and they always end up in arguments.

Thanks

getmore4less

JimmyTheWig wrote: »

But would this not mean you would need a mortgage for pretty much 100% of the price you are paying for it?

NO.
Just the amount to cover the debts in the estate(they in effect own the rest allready).

steveeo

JimmyTheWig wrote: »

But would this not mean you would need a mortgage for pretty much 100% of the price you are paying for it?

I think the estate would allow us to buy this property for lets say £16000 to cover the debts but the property is worth a lot more than £16000

but if we had to sell it to anyone else then the estate would sell it at full value I think

JimmyTheWig

steveeo wrote: »

Jimmy, we are looking into this but I have a feeling that a lot of people on MSE would take it that this would be done for the wrong reasons, our own benefit and profits, I have lots of posts on the RTB on here and they always end up in arguments.

Yes, but you could sell it back to the council 6 months later, after you were able to secure a (small) mortgage on the grandfathers property.
I'm guessing that if you mortgage the grandfathers property after inherriting it then you can do so against its full value which should be simple enough.