Lender Restrictions

lennarrd

Good evening

Is it usual for a lender to deny a mortgage because the seller has probate and has not transferred the property via Land Registry into their sole name?

I am being told they (the lender) will not consider it until the property is registered to a living person for 6 months.

Can someone confirm please as I have not come accross this yet?

Thank you

Thrugelmir

The executors of the estate of the deceased can sell the property directly.

kingstreet

You either approach this as a purchase from the estate; or the property is transferred into the name of the beneficiary and then it's a remortgage.

If going the latter route, some lenders apply their six month rule, others don't so you are seeing one lender's policy which should not be attributed to the whole market.

amnblog

kingstreet wrote: »

one lender's policy should not be attributed to the whole market.

Quote of the week!


These 11 words alone could answer 1 in 10 of the queries on this forum.

Land_Registry

Do you mean that you are buying the property from the executor and your mortgage lender won't lend?

As kingstreet mentions though lenders may apply the 6 month rule in different ways so you may have to apply elsewhere?

kingstreet

We had such a case recently.

We ensured that the property remained within the estate and raised a BTL mortgage to enable one of the beneficiaries to purchase the property, providing the mortgage funds to settle the inheritance of the other beneficiary in cash.

The alternative would be property becoming jointly owned by the beneficiaries, possibly resulting in a reduced pool of potential lenders due to the six month "rule."

Then, there would be a transfer of equity and possible stamp duty implications. Where possible, the purchase is the way to go.