Mortgage application advice

Lummoxley

Hi, thanks in advance for any advice. I will be inheriting a house in my name only but will want to take out a mortgage of 30%-40% of the value to settle some outstanding private debts. My bank have advised that I can get a mortgage for this amount. Is there any reason a bank wouldn't lend on an inherited property if I have no other outstanding debts?

Secondly, I need to set up a new bank account, would the application have a detrimental effect on a later mortgage application?

Thrugelmir

Debt consolidation is a purpose that some lenders will decline the application on. As provides the answer but not the solution to the problem.

Lummoxley

Sorry, I didn't make myself clear, the property will be in my name after probate but I will owe some money to siblings as a private arrangement post probate. This is not being used as any sort of tax avoidance, just a way keep the family home within the family . All interested parties are fully in agreement.

Contemptuous

Some lenders will require you to own the property for 6 months before taking out a mortgage on it.

amnblog

Contemptuous wrote: »

Some lenders will require you to own the property for 6 months before taking out a mortgage on it.

This is a classic issue in these scenarios.


Get some mortgage advice before the property comes out of probate.

Lummoxley

amnblog wrote: »

This is a classic issue in these scenarios.


Get some mortgage advice before the property comes out of probate.

I set out the scenario in an initial enquiry I sent to a mortgage broker several weeks ago and they did not mention this issue.

amnblog

Then they are not very switched on.

Lummoxley

amnblog wrote: »

Then they are not very switched on.

Lets just say I won't be using them to find me a mortgage now. :mad:

Is it just some lenders or all that have this stipulation? We could wait six months but I would rather it was all sorted sooner rather than later.

kingstreet

Most.

I can only think of a couple off the top of my head which don't operate a six month rule. Another couple say they will look into such cases with a bit more scrutiny, but won't automatically say no.

Another broker would be best way to approach this if you can't do the mortgage before the property is transferred to you.

Usual route is for beneficiary to purchase property from estate and estate to reimburse other beneficiaries in cash, but I'm not sure this is your exact scenario.

Lummoxley

kingstreet wrote: »

Usual route is for beneficiary to purchase property from estate and estate to reimburse other beneficiaries in cash, but I'm not sure this is your exact scenario.

Ah, maybe we've been looking at this the wrong way. I'm just about to put my property on the market and was going to use the equity to clear the small mortgage outstanding on my deceased parents house. The rest of the equity would then be used alongside the mortgage to give my siblings their share.

From what you're saying I'm assuming we should do this all whilst in probate. And try and find a clued up mortgage broker.

kingstreet

Yep. We had a similar case not so long ago and ensured it was done this way to avoid the issue reported.