Remortgaging inherited home to buy a second home?

allibongo123

Hi everyone

this is my first post on here, so hello!! l wanted some
advice if possible. My sister and I inherited our parents home a few years back. We are both not in the position to sell at the moment, however I am wanting to buy a house with my partner. I was wondering if remortgaging the inherited house (mortgage free ATM) to use towards a deposit for another house would go against me? I've read a lot on here how mortgage lenders like own money etc. my sister is happy for me to do this - as she would also like some money to pay off some debts. I've also read bits and bobs about tax relief?? does this only apply for those who have BTL mortgages?
I would be very grateful for any info!
thank you in advance
Alli x

Dave_Ham

Who is currently living in this mortgage free property (assuming you both together) and who would live in it after you had raised finance?

kingstreet

What he said ^, plus, will you then want a mortgage on the new purchase and will your income cover both mortgages?

StuC75

Sounds like would be easier for the sister to mortgage the property into her name for you to then receive a payout..

Otherwise jointly mortgaging to get a bit of money for you both to use whilst you then try to get another mortgage, with the original being let to the other Sister just seems to have too many what-ifs associated to it.

Try to make it as straight forward, either:
1 - She buys you out & takes on the property herself.
2 - sell the House outright,split proceeds and move on as you need.. What is there which makes this not possible?

3 - Your mish mash - mortgage together, take a wedge of money, then try to get a second mortgage..
4 - Carry on as-is with your sister paying you half the rent on the house...

Dave_Ham

All in agreement, this can be done although likely to require a broker and enough income to support both mortgages (with the 2 different joint owners)

Not all lenders will like this sort of structure.

EKAndrew

does your sister actually pay "rent" on this property? or does she live rent free? if she pays it, where/who does it go to?

quotememiserable

I guess you must've agreed all this with your sister, but it seems she has the fat end of the stick. She lives rent free in a house you half own, and yet you have to pay rent. It seems she should pay you half market rent, or else take on the house fully by mortaging to half its value and giving you the money.

StuC75

So why is your sister living Rent Free? That is likely to be her obstacle to selling up \ paying your half of the market value in either RENT or to Buy You Out.

At present this is Win Win for your Sister as She is living Rent Free whilst you are paying rent and aspiring to have 2 mortgages yourself..

Worse Case if you both mortgaged, You would be Joint and Severally liable so if she didnt pay you would both be pursued for Full amount..

Simplest and Fairest scenario is for her to mortgage on own to pay you out half the value or to Sell up..

Either you are doing a big favour for your Sister, or theres still an emotional attachment to the house..

allibongo123 wrote: »

There is no rent on the house, if we remortgaged then we would both make repayments in the usual way