House purchase using inherited house as deposit

fromtheshires

[FONT=&quot]Sorry about the title of this thread but I couldnt think of anything else to call it.
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[FONT=&quot]Bit of a hypothetical situation we were discussing this at the weekend and didn’t know an answer to it (yes, we talk about odd things….)[/FONT]

[FONT=&quot]If an uncle dies and [FONT=&quot]someone[/FONT] gets left 50% of the house with their sister but they want to purchase the house using their proceeds of the house sale as capital is this possible or would a mortgage company not touch this type of purchase?
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[FONT=&quot]I'm sure this happens all the time and someone will know the answer.[/FONT]

[FONT=&quot]If someone wants some numbers for this what if discussion we were having, I will keep it simple and use nice round easy numbers: £100K house split 50:50, no additional assets owned by the people inheriting so only the money from the sale being used as a deposit to purchase. [/FONT]

[FONT=&quot]Personally, I think that they would allow this type of purchase as they know that they will get the money, but only issue a £50K mortgage at their end and on the proviso the remainder to be sent straight to them upon completion.[/FONT]

G_M

Bit confused. Is this what you mean?

fromtheshires wrote: »

[FONT=&quot]If an uncle dies without (leaving a will?), and they (who[FONT=&quot]? the nephew/niece?)[/FONT] get left 50% of the house with their sister but they want to purchase the house (they want to purchase the other 50% of the uncle's house?) using their proceeds of the house sale (what house sa[FONT=&quot]le[/FONT]? [FONT=&quot]the one they currently own?)[/FONT]as capital is this possible or would a mortgage company not touch this type of purchase?
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1) if the niece wants to sell their current property, and use the equity as a deposit to raise a mortgage in order to buy out the sister's 50% share of uncle's house, I see no problem.

Alternatively, the niece already owns 50% so could use that as deposit and borrow the full 50% needed to pay the sister.

2) If, however, the plan is to SELL the uncle's house (splitting the money 50/50 with sister, and use that money as deposit for purchase of a new property, yes that is possible, once Probate is granted and the executer's have wound up the Estate (eg paid all debts, tax etc).

booksurr

no wonder you are confused given the confused nature of your question

there are 3 possibilities:

1. the house is sold and the money is split 50/50. Each person can then spend their share of the money on whatever they want, for example as a cash deposit on buying a place for themselves

2. Person A wants to keep the house, whereas Person B wants money to fund their own purchase of their own property. Person B can sell their 50% share to person A, and Person A can either pay for that in full with cash, or if they don't have the money, Person A would have to get a mortgage in person A's sole name so they can pay off Person B's share and therefore Person B gets cash whilst Person A gets 100% ownership for the future.

3. Neither Person A or B want to sell it as both want to remain owners. They can:
- either retain the property as a co-owned second home (or one of them could move into it). If they want to get cash out of the property then they would both need to go on a joint mortgage which would be based on their respective income and affordability

- or, they decide to let the property and see if they can release equity via a let to buy mortgage

fromtheshires

Sorry, guys, I was clearly having some sort of meltdown when I typed this as it actually makes no sense whatsoever! I appear to be speaking gibberish. It was a very simple question and I seem to have confused things royally. G_M wins by answering this as answer one in their reply.

All this for a hypothetical discussion we were having as well.

G_M

but please put us out of our misery and explain what you DO want to do......

getmore4less

The easiest way to think of buy outs from estates its to buy the house off the estate.

A. wants to buy the house(say £100k)

They will inherit 50% (£50k) on completion.

They buy the house with a £50k deposit get a mortgage for £50k just like they would buying any house.

The mortgage company gives £50k to the estate on completion

A. has inherited £50k as value in the house.

THe estate has £50k to distribute to others

elverson

You mean they inherit 50% after probate (not completion) surely?

getmore4less

elverson wrote: »

You mean they inherit 50% after probate (not completion) surely?

No.

The actual transfer of the £50k value happens at completion.

That is when the beneficiary officially gets possession of their inheritance

Their beneficial interests can happen earlier depending on the will even before probate but their legal ownership happens when they complete.

They could assent the house jointly first then arrange a second transfer with the mortgage but that can introduce complications, far easier to do a bog standard purchase of the estate.