Mortgage to pay siblings off

rpg73

If my mum does a deed transfer to myself for her house, I currently live with her, there is no mortgage on the house.

Can I then mortgage 2 thirds of the value to pay my 2 siblings when her time comes, she is terminally ill.

House is valued at appx £60k and I would need to raise £40k to pay them off, this is what a mortgage advisor suggested as I could not get a mortgage on the house while my mum still resides there. Lenders required vacant possession.

TIA

Foxy-Stoat_3

You could take out a secured loan on the property any time as long as you meet the affordability calculators, doesn't need to be a mortgage.

ValHaller

Is there any reason for her to transfer the property to you now rather than leave it to the 3 of you in a will???? If she just gives it to you, there may be taxes to pay - plus your siblings are going to be vulnerable to you just deciding to keep the place, which may not play very well in a situation of terminal illness.

rpg73

She's just thinking it's easier to title transfer to me as I want to still live there. If she left it in a will and I wanted to live there I'd still have to pay 2 thirds of the value out to my siblings.

Foxy-Stoat_3

rpg73 wrote: »

She's just thinking it's easier to title transfer to me as I want to still live there. If she left it in a will and I wanted to live there I'd still have to pay 2 thirds of the value out to my siblings.

If you couldn't raise the cash then the property would have to be sold, or you could pay rent to the 2 siblings.

Yorkie1

rpg73 wrote: »

She's just thinking it's easier to title transfer to me as I want to still live there. If she left it in a will and I wanted to live there I'd still have to pay 2 thirds of the value out to my siblings.

It might be easier from her perspective, but if she wants to be fair / equal to all the siblings, then leaving it in her will is the best thing for her to do.

If she sells it to you in advance, then your siblings have no guarantee that you will pay them off - and no way of ensuring it happens (what if you can't get a loan, for example). If you do pay them off, then you'll be doing so at the same time irrespective of whether she gifts it to you now or leaves it via will.

How are relationships with your siblings? What do they say about the plan?

ValHaller

rpg73 wrote: »

She's just thinking it's easier to title transfer to me as I want to still live there. If she left it in a will and I wanted to live there I'd still have to pay 2 thirds of the value out to my siblings.

I think that she is mistaken. If she transfers it to you, then there is no effective way to ensure that you do pay 2/3 of the value to your siblings, short of some sort of trust deed, which will not make things simpler. If you want simple the will is the way to do it.

Do you envisage problems from your siblings if this is done in the will?

rpg73

Foxy-Stoat wrote: »

If you couldn't raise the cash then the property would have to be sold, or you could pay rent to the 2 siblings.

I had no problems getting a mortgage approved the reason they turned me down was my mum still lived there, she was giving me 1 third off the price and then she would have paid the 2 siblings a 3rd each.

Yorkie1 wrote: »

It might be easier from her perspective, but if she wants to be fair / equal to all the siblings, then leaving it in her will is the best thing for her to do.

If she sells it to you in advance, then your siblings have no guarantee that you will pay them off - and no way of ensuring it happens (what if you can't get a loan, for example). If you do pay them off, then you'll be doing so at the same time irrespective of whether she gifts it to you now or leaves it via will.

How are relationships with your siblings? What do they say about the plan?

Every ones happy with the arrangement either way, they both already have houses, just looking for the best way to release their share and what options are available in these situations.

ValHaller

rpg73 wrote: »

I had no problems getting a mortgage approved the reason they turned me down was my mum still lived there, she was giving me 1 third off the price and then she would have paid the 2 siblings a 3rd each.

OK, what seems to have happened is that you have got stuck in a mindset that this is resolved by transferring the house. It is time now to change tack and look at doing it with a will.

rpg73

I'm not stuck in any kind of mindset, it's just an option that was suggested by a mortgage adviser.

The question at hand is whether I can get a mortgage on a house I own outright with no current mortgage on it. Regardless of if its left in the will or deed transfer to pay the 2 siblings.

ValHaller

rpg73 wrote: »

I'm not stuck in any kind of mindset, it's just an option that was suggested by a mortgage adviser.

The question at hand is whether I can get a mortgage on a house I own outright with no current mortgage on it. Regardless of if its left in the will or deed transfer to pay the 2 siblings.

The mortgage advisor is the wrong person to advise on this.

Primarily, it is for your mother to make the transfer of the asset in the best way which meets her requirements to give you and your siblings fair shares.

Your mother is not the client of the mortgage adviser, so the mortgage adviser will only try to serve you as client and get you a mortgage. Your mother needs a solicitor to sort out a will. And your siblings deserve the peace of mind from not having to worry about being dependent on your good will to cut them in on their shares in dues course.