Inherited property - one beneficiary wants to buy other 2 out

Spooc

I'm a newbie to the forum and am looking for some advice please. My mum died recently and left her house (mortgage free) to me and my brothers equally. One of my brothers is currently in rented accommodation and wants to get a mortgage to buy me and my other brother out and move into the property. His mortgage application was agreed in principle but now the underwriters have rejected it saying they cannot "remortgage a property where the applicant is not residing". The financial advisor says that if my brother can move into the property and get a council tax bill with his name on the application will go through. This seems strange to me as he is not remortgaging the property, he is trying to get a first mortgage on it in his name to buy out our shares. Has anyone got any advice as to what we should do? Thanks in advance

getmore4less

The simple solution should have been buying from the estate as a normal purchase not a re mortgage of partial ownership.

Has the property been transfer into your names yet.

Spooc

Probate has been granted and originally we were going to sell the property but all agreed that it would be best for my brother to buy us out. We haven't done anything about transferring the property into our names. Should we do that & Should my brother go back to the financial advisor and explain that he wants to buy from the estate? From what he says this is what he explained to the advisor and I'm thinking that the advisor applied for the wrong product!!!

getmore4less

Looks like the FA has messed up not knowing this would be an issue.

There may be some technical reason it has to be a re mortgage as he is a beneficial owner.

Mojisola

It's not unusual for one beneficiary to buy out the others. I would try a different advisor.

It's probably easier for the house to be sold by the executors. Once it goes into your names, your brother could move in and live there. If he wanted to be awkward, you could be put in the position of taking him to court to sort things out.

Spooc

The executors are dealing with the sale of the house to my brother and we are all agreed that he can buy it. So effectively he is buying from the estate and therefore I don't see why it's been rejected as a remortgage?

jackyann

I'm no expert in this field, but I wonder whether the issue is your brother having a stable address?

At least 2 of my children have run into this issue: both were doing short-term jobs in different parts of the country, and were on the electoral rolls at their childhood home. Both were advised by financial advisers that before applying for mortgages they should go on the electoral roll at their current addresses.

I am not sure of the legal issues, but when I inherited a house with my brother, I also by co-incidence needed a short-term place to live in the area. My brother agreed to me living in our inherited house (of course I paid the bills) and I organised its sale during that time. So I do wonder if your brother could indeed move in, with the other beneficiaries' agreement - he could even pay rent to you both to keep it above board - whilst he sorts out his mortgage application?

nom_de_plume

jackyann wrote: »

....
I am not sure of the legal issues, but when I inherited a house with my brother, I also by co-incidence needed a short-term place to live in the area. My brother agreed to me living in our inherited house (of course I paid the bills) and I organised its sale during that time. So I do wonder if your brother could indeed move in, with the other beneficiaries' agreement - he could even pay rent to you both to keep it above board - whilst he sorts out his mortgage application?

Having read some of the other horror stories on this forum this is a decision that must be based on the OP's knowledge and experience of their brother.
It's a great idea if the brother can be relied upon and trusted to get things sorted or move back out if he can't and the property does end up needing to be sold on. If there's any doubts about his integrity, then it's probably easier and safer to treat his as a total outsider for the purposes of him buying the property. I can guarantee that's what a solicitor would advise or at least the option of a legally binding agreement to let him move in prior to buying the other shares.

bouncydog1

Personally I would get everything sorted before he moves in - e.g. Legal side and funds transferred. otherwise you could end up with him as part owner living in the property, not paying any rent and refusing to move out. There is also not an awful lot that can be done legally and you and the other sibling could end up with massive legal bills. Would you allow a third party to move into a property without purchasing it? There should be no reason at all why he cannot purchase from you and probably needs to sort an appointment with the lender direct rather than using an IFA to explain the position.

getmore4less

solicitor executors were happy with us taking over a property.
Reduces the executor involvement hence charges.