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Inherited property with mortgage - looking for advice
Mrsscoobysti
Posts: 7 Forumite
I'll try and keep this simple, and hopefully someone will be able to advise/help...thanks
We have inherited a flat with a £36k mortgage on it, that we want to keep and rent out.
There was not enough money left in the estate to clear the mortgage.
Our solicitor is ready to transfer the lease into our name BUT
The existing mortgage lender Skipton will not transfer the lease until the mortgage is repaid.
So our solicitor wants to do a transfer of equity, where by new mortgage lender transfers funds to Skipton, and then the lease is transfered all on the same day.
We had a BTL mortgage agreed in principle with Natwest, but they will not proceed unless they have a letter from Skipton confirming that they are happy to do it this way.
Our solicitor says this is not required and Natwest shouldn't have a problem. This has been on hold for 2 months now and we really need to move things along as we are paying the mortgage on the flat and it is empty.
My husband has lost all patience and the plan is to use our savings topped up with a personal loan to clear the Skipton mortgage so we can own it, and get it done up ready to rent.
And then in a month or so's time get a BTL mortgage on the flat to clear the personal loan.
Our biggest concern is whether this will cause us any tax issues - can you get a mortgage on BTL property you already own without paying any tax.
Or will getting a loan to help clear the mortgage mean we are liable for any tax?
I guess what I am asking is - is doing it this way ok?
We have inherited a flat with a £36k mortgage on it, that we want to keep and rent out.
There was not enough money left in the estate to clear the mortgage.
Our solicitor is ready to transfer the lease into our name BUT
The existing mortgage lender Skipton will not transfer the lease until the mortgage is repaid.
So our solicitor wants to do a transfer of equity, where by new mortgage lender transfers funds to Skipton, and then the lease is transfered all on the same day.
We had a BTL mortgage agreed in principle with Natwest, but they will not proceed unless they have a letter from Skipton confirming that they are happy to do it this way.
Our solicitor says this is not required and Natwest shouldn't have a problem. This has been on hold for 2 months now and we really need to move things along as we are paying the mortgage on the flat and it is empty.
My husband has lost all patience and the plan is to use our savings topped up with a personal loan to clear the Skipton mortgage so we can own it, and get it done up ready to rent.
And then in a month or so's time get a BTL mortgage on the flat to clear the personal loan.
Our biggest concern is whether this will cause us any tax issues - can you get a mortgage on BTL property you already own without paying any tax.
Or will getting a loan to help clear the mortgage mean we are liable for any tax?
I guess what I am asking is - is doing it this way ok?
0
Comments
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Mrsscoobysti wrote: »....Our biggest concern is whether this will cause us any tax issues - can you get a mortgage on BTL property you already own without paying any tax. ....
For tax purposes you will have acquired that property at its probate value, and thus your BTL business will have acquired that property at its probate value, and therefore the interest payable on any loan up to that value will be an allowable expense for income tax purposes.Mrsscoobysti wrote: »...Or will getting a loan to help clear the mortgage mean we are liable for any tax?
No.Mrsscoobysti wrote: »...I guess what I am asking is - is doing it this way ok?
Yes.
But as always, you should always check with a real proper accountant.0 -
You'll find with most lenders you won't be able to remortgage until you've owned the property six months.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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Mrsscoobysti wrote: »
We had a BTL mortgage agreed in principle with Natwest, but they will not proceed unless they have a letter from Skipton confirming that they are happy to do it this way.
Our solicitor says this is not required and Natwest shouldn't have a problem. This has been on hold for 2 months now and we really need to move things along as we are paying the mortgage on the flat and it is empty.
Is the solicitor on the Skiptons panel?0 -
Thrugelmir wrote: »Is the solicitor on the Skiptons panel?
I don't know - does it make a difference?0 -
Is the problem that Skipton won't provide the letter?
If not, why not?0 -
For some reason the solicitor doesn't want to get them involved?!
Maybe I should just call Skipton myself - there's an idea!0 -
So I decided to call Natwest again and they are now saying that it shouldn't be a problem without a letter!!! We just need to go through a formal application with a mortgage advisor. :mad: Why does everything have to be so complicated?!!!!
What are the odds that we do this and then they decided that they need a letter!!!!0 -
I'm amazed you you've let this drag on so long. When you hit an issue, you speak to each party concerned. Why didn't you speak to NatWest 2months ago? Why didn't you speak to Skipton?
a) there is no real reason the banks can't do what you wnt them to
b) there is no reason not to use your alternative, albeit more expensive, alternative (bridging loan).
Bang some heads together, get a mortgage broker If thats what it takes) and get it sorted!
Every month wasted is a month's rent lost!
Are you up to speed with all the other aspects of letting?
New Landlords (information for new or prospective landlords)0 -
If you were the beneficial owners there should have been nothing stopping you starting the work and getting it rented, executors should have agreed to the work being done and getting it let(subject to lenders agreement).
Buying of the estate should not be this much of a problem for a lender.0
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