Deaths and bridging loans!

baroninlondon

HI all

We are currently in a chain with offers made and accepted and everyone getting their mortgages and surveys done.

We have a shared freehold (with upstairs) which is only at a few years left and need to extend it with our neighbour at the point of exchange with our buyers. This is a requirement for our buyers' mortgage to have a long enough freehold.

The problem is our neighbour died recently. His wife in time will inherit everything (the house was in the husbands name) but this I assume will take months and months to sort. However, we know our buyers are happy to wait three months so this may suit them.

For us however, we need to move by end of October otherwise our chain will fall apart. My brother is quite rich and could lend us some money to help keep things moving - ie some type of bridging loan. We still need a mortgage - its roughly 60% LTV.

Does anyone have any ideas about the best process for this? IE avoiding hefty tax bills, best way to borrow the money. How do mortgage companies react to these types of things. Is there a solution such as the wife as executer could sign off freehold extension.

Any advice greatly received.

G_M

baroninlondon wrote: »

HI all

We are currently in a chain with offers made and accepted and everyone getting their mortgages and surveys done.

We have a shared freehold (with upstairs) which is only at a few years left
freeholds last for ever. You mean lease?
and need to extend it with our neighbour at the point of exchange with our buyers. This is a requirement for our buyers' mortgage to have a long enough [STRIKE]freehold.[/STRIKE]lease.

The problem is our neighbour died recently. His wife in time will inherit everything (the house was in the husbands name) but this I assume will take months and months to sort.
It could.
However, we know our buyers are happy to wait three months so this may suit them.

For us however, we need to move by end of October otherwise our chain will fall apart. My brother is quite rich and could lend us some money to help keep things moving - ie some type of bridging loan. We still need a mortgage - its roughly 60% LTV.
So you'd get a new mortgage and top up with 40% cash loan rom your brother?
* do you have an existing mortgage?
* if so, new lender may be reluctant to lend
* 2nd home = 3% extra SDLT

Does anyone have any ideas about the best process for this? IE avoiding hefty tax bills,
the only tax is SDLT which you can claim back when you sell.
best way to borrow the money.
I thought your brother was lending? Best way? Bank transfer.

How do mortgage companies react to these types of things.
Badly. Consult an indepedant mortgage adviser.

Is there a solution such as the wife as executer could sign off [STRIKE]freehold [/STRIKE]lease extension.

Any advice greatly received.

If the deceased's wife is Executer she now controls the property, pending Probate and Estate disyribution. So yes, she could extend the lease.

eddddy

G_M wrote: »

If the deceased's wife is Executer she now controls the property, pending Probate and Estate disyribution. So yes, she could extend the lease.

Is the wife likely to be a seasoned property owner who understands freeholds, leaseholds, lease extensions etc?

My worry would be that if somebody is new to these types of things, it can be difficult for them to understand why they should be extending somebody else's lease (especially if they have no plans to sell their own flat).

If you can't 'persuade' them, you might have a problem.

G_M

eddddy wrote: »

Is the wife likely to be a seasoned property owner who understands freeholds, leaseholds, lease extensions etc?

My worry would be that if somebody is new to these types of things, it can be difficult for them to understand why they should be extending somebody else's lease (especially if they have no plans to sell their own flat).

If you can't 'persuade' them, you might have a problem.

That's a good point, given that the OP himself does not understand lease/freeholds - and he's the one with the immediate interest in the matter!

A lot might hang on the remaining lease on the joint freeholder's flat. If that is short too (same length?) and would benefit from extending, then it's easier: extend both leases at the same time.

If you just extend one, then that joint freehlder benefits form an extended lease whilst the other does not, so would normally want some sort of financial compensation. Much harder to negotiate.

Slinky

If the neighbour was elderly and the property was only in her husband's name, as was more common 40+ years ago, the chances of her being a seasoned property/leasehold expert are slim, and this is probably way down her list of priorities if she's grieving for her husband.