remortgage a gifted house..

anderson1987

Here is my dilemma:
I want to buy me late grandmothers house rather than it going on to the open market due to sentimental values. We have been advised a way in which to do this so I dont need a deposit to get the house, here is what we have been told.. get my mam and uncle to gift me the house with a charge against it (say 100k for instance), the house will then be in my name, then remortgage the house and pay the 100k off the charge that was put on it.

My questions are: 1. Is this viable? 2. If so how quick can I remortgage the property?

P.s. the house is freehold if that helps..

Thanks

GMS

Who owns the house now and how long have they owned it for?

Broker will be useful for you here.

Possibility of using equity as a deposit.

anderson1987

My mam and uncle own it now as it has been passed to them in the will

getmore4less

The easiest way would have probably been to buy it off the estate with the gifted deposit from those with the beneficial interest.

If it has already been transferred into their names that may introduce an issue if that was recent as many lenders like to wait 6months before lending on a property that has changed hands.

Gifting and a charge seems an over complication that will just mean more fees.

chanz4

how much equity do you have, or will you have other than the £100k?

Wh05apk

Can you clarify the value of the property?
Are they letting you have it at undervalue, or are you paying full market price?
Do you have any deposit?

anderson1987

The property is worth roughly 70k and they are letting me have it for 50k. I want to remortgage it for 70k instead of getting a loan to renovate it.. and I dont have a deposit (as this happened quicker than intended ) and if I did the deposit would have had to be in my account for 6 months before I used it

somethingcorporate

If it's worth £70k you won't be able to remortgage it for £70k, 100% LTV mortgages haven't existed in years.

silvercar

I don't know why they would want a charge of 100k on a house worth at best 70k.

One advantage of going on the open market is that you find what it is really worth. It is very easy to overvalue property that hasn't been sold and to underestimate the value of homes needing renovation.

If it is worth70k in its current state, you could be able to get a mortgage for 50k, subject to the usual earning and credit requirements.

Would your parent and uncle then allow you to spend some of the 50k on refurbishing it while you save up a deposit?

That way they will eventually get all their 50k but not as early as they might have anticipated. Given that this was an inheritance they may be prepared to wait, as if your grandmother had lived longer they wouldn't have yet had the inheritance.

anderson1987

The 100k was just en example... I am getting the house for 50k and hoping to spend 15 on renovating.. with the house being passed down to me, I wouldnt need a deposite would I?

somethingcorporate

You won't be able to remortgage for 6 months, that is the rules that almost all lenders have iirc. Even so, whether you'll be able to go to 90% LTV is a question for the lender. They may not agree with your £70k valuation.