Being left a house with buy to let mortgage, can we remortgage as residential?

shiningplanets

My mother in law is very ill and doesn't have long left. She is leaving us a house on which she has a buy to let mortgage. We are the current tenants (although I only recently found out that her mortgage provider doesn't allow renting to relatives..) and want to personally own the house. We are also bring left a pension lump sum which will pay for most of the remainder of the mortgage. Can we pay this lump sum to current buyto let mortgage provider and then change mortgage providers and get a residential mortgage for the remainder? There will be less than ten thousand left to pay on the house after paying the lump sum. I have no idea of how any of this works. Thanks.

AndyBSG

There's a link here which may help

http://www.property118.com/inheriting-properties-buy-let-mortgages/73341/

Also, there's a chance there may not even be a mortgage because depending on what form of life insurance was taken out with the mortgage(if any) you may find the mortgage is paid off on death so should look into that with the mortgage provider.

Technically, the BTL mortgage would have ended on death so there are standard processes in place while probate is sorted which I believe 'suspend' any mortgage payments due until the estate is settled.

shiningplanets

Thank you for your reply. There is definitely no life insurance, that has been discussed with her. That's why she has left us the pension lump sum, to pay off the majority of the mortgage and then hopefully get a mortgage for the rest? Who should I go to for advice about this situation?

kingstreet

A decent mortgage broker.

They will piece together the best way to approach this. It would be better to purchase the property rather than try to remortgage it once probate has been granted and the property has passed to you.

If that happens, many lenders won't lend until the property has been in your ownership for six months.

If she could sell you the property now on a concessionary purchase basis, you could use a reduction in the price to be your deposit so you have to put down no cash of your own and the mortgage funds could be used to repay the current BTL mortgage by her solicitor at completion.

She would need to have capacity to make such financial decisions though, so I don't know how feasible this might be.