Buying out half share inherited property

Steve646

I recently inherited a property jointly with my brother. I intend to carry on living in the property and buy my brother out, which my brother is happy to do. To do this i will need to get a mortgage but what is the best way to do this. My thought at the moment is to transfer the property into my name then remortgage to pay my brother, or would it be best to just get a mortgage. Which would work out cheaper mortgage or remortgage? Just to clarify my thinking about the initial transfer, I have been quoted £700+ for the conveyance to my name but if I transfer the title deeds myself with a quick visit to the land registry office it will cost me £40!

AdrianC

If you don't have a mortgage currently, then you aren't remortgaging. Remortgaging is taking out a new mortgage to replace your existing mortgage.

It won't make any difference at all whether you do the paperwork before the mortgage or at the same time. It's purely down to whether your brother is happy to sign over the paperwork before receiving the money.

getmore4less

Buy off the estate with 50% deposit(your share).

Overcomes some of this issues of trying to mortgage a place you have owned for a few days(some lenders want 6months)
Also becomes a more standard purchase not a mortgage to pay off a debt.

Should cost about the same.

G_M

Is there currently a mortgage to be paid off by the Estate?

Assuming

a) there is currently no mortgage on the property, and
b) you are Executer of the Estate, and
c) you and your brother are on good terms and he trusts you

then

a) transfer the property into your name
b) do it yourself - no need for a solicitor
c) send TR1, AP1, ID1, Grant of Probate to the Land Registry

Then apply for mortgage, pay lender for a solicitor to apply the Charge, and pass the money you receive to brother.

You could do it all in one, and pay a higher solicitor fee to manage both processes - up to you.


https://www.gov.uk/government/publications/registered-titles-whole-transfer-tr1

SmlSave

^^ what G_M said ^^

ManuelG

What happens if you can't get a mortgage, after you've transferred the entire house into your name?

davidmcn

G_M wrote: »

a) transfer the property into your name
b) do it yourself - no need for a solicitor
c) send TR1, AP1, ID1, Grant of Probate to the Land Registry

Then apply for mortgage, pay lender for a solicitor to apply the Charge, and pass the money you receive to brother.

I think doing it that way you'd hit problems as most lenders want you to have had a registered title for at least six months. Probably easier just to get a solicitor to act for you to purchase and mortgage simultaneously in the usual way (also saves any worries about what happens if you transfer title and then encounter a hitch with getting the money).

getmore4less

If the brother needs the money and you don't have it don't risk it.

G_M

ManuelG wrote: »

What happens if you can't get a mortgage, after you've transferred the entire house into your name?

well I did put in the caveat 'assuming brother trusts you' - but fair point.

most lenders want you to have had a registered title for at least six months.

I didn't know this. What about when you buy a property with a mortgage? You haven't had the Title for 6 months in that case.......

Though I was aware most lenders reject applications for a mortgage on purchase where the seller has owned for less than 6 months. Nevr understood why, and don't know if that would apply here.

Independant mortgage broker could easily answer these Qs and it would certainly make sense to check before you start.

Steve646

Thanks for your input guys, especially G_M. Already filled out the Ap1, As and ID1. Interesting to hear bout the 6 months bit. Already enquired bout the remortgage route and there doesn't seem to be a problem there. Thanks again guys.��

davidmcn

G_M wrote: »

Though I was aware most lenders reject applications for a mortgage on purchase where the seller has owned for less than 6 months. Nevr understood why, and don't know if that would apply here.

Standard CML Handbook requirement is to report if the current owner has been registered for less than six months (whether that's a seller or someone remortgaging). One of these things which doesn't necessarily have obvious logic behind it but is associated with fraud. It can sometimes be explained away if there's a good reason, and I suppose an inheritance might be. Best to specifically check this point with a broker in case it's been overlooked.