Using Inheritance as a house deposit

askyfullofstars

My mum died in July this year, her probate is nearly all sorted and the conveyancing has just started on her property.

Before she died, she explained to us all how what we should do with our shares of her inheritance. Obviously she said we weren't tied to it but it would make her happiest. She explained to my husband and I that she wanted us to use our share as a deposit for a house, as we had started saving for a deposit a few years ago, got quite far and then DH got made redundant and so we ended up going through quite a lot of our savings as the job market was slow, luckily we got back on our feet but are now stuck in the rental trap (ie cant save for a sizable deposit due to rent/living costs - couldnt bunk in with family to help save as they all live too far away). I think it was a lovely idea.

So, Estate agent reckons that as no chain either way we could be completed and done and dusted in 4-6 weeks.

I did have a bit of a look to see what kind of properties are about round here and I have seen one that I really like. Its not big or extravagant or anything, but it is big enough for what we need, with a beautiful kitchen and a playroom for our son. I had even considered viewing it or speaking with the agent/mortgage lender at the bank about our situation to get a bit of advice as Ive never had to do this before.

When I asked the EA we are selling my mums property with for buying tips, she was very helpful but did state that as I have the grant of probate and my mums/financials/a house in conveyancing that we should be able to secure a mortgage or at least an agreement in principal, based on the fact that the money for the deposit will soon be paid, rather than wait for the money to be paid but this surely cant be right.

(putting aside the moral argument raging in my head that even though it is the sensible thing to do with my inheritance, and its what my mum wanted, I hate thinking about it, it almost makes me feel dirty in a way I cant explain, it just feels wrong).

NOVAMET21

Sorry for your loss. There are many people out there who would just spend their inheritance money on holidays, new cars, drinks and other things. However, you are planning to put it towards the deposit which is what your mum wanted. So good on you and she would be proud and your son will get the benefit as well in the future.


At first I thought the same (this surely can't be right). But then thinking about it its like if you own a house and wanted to sell and buy another property. The inheritance money would be same as your equity if you own a property. Same logic but I might be wrong.

getmore4less

As you have a time line and an idea of your cash you can start your purchase timeline investigating mortgages and viewing.

askyfullofstars

I think I'm just a bit scared to look in case we get turned down for a mortgage until we physically have the deposit and then by the time that's sorted any house we had found may have gone iyswim?

Thrugelmir

No one will accept an offer until you are in a position to proceed with the purchase.

askyfullofstars

I understand that. After all a seller doesn't want to hang on to a property indefinitely. But would a lender give you an approval/approval in principal if your money is in probate?
It's being dealt with by a solicitor (the whole probate) and all that remains is the house. Which has no chain/cash buyer.

Bonfire_Bride

I'm sure an AIP can be arranged without them seeing actual funds in an account.

Sorry for your loss.

chanz4

We have x2 house similar situation, until sold trust me the cash isn't there

getmore4less

askyfullofstars wrote: »

I understand that. After all a seller doesn't want to hang on to a property indefinitely. But would a lender give you an approval/approval in principal if your money is in probate?
It's being dealt with by a solicitor (the whole probate) and all that remains is the house. Which has no chain/cash buyer.

You are overthinking there are very few genuine CASH in the bank buyers.

Nearly everyone has some dependency on something else going right, most often a house sale.

Loads will have a house on the market, start looking before there is an accepted offer in place(you are ahead of that) and will have done their homework on their borrowing requirements.

This is the way things are done so just get on with it

you can start looking and go through the affordability process to know what sort of price ranges you can afford.

By the time you have done that you will be closer to the cash in the bank as long the sale has not fallen through.

Captain_Shambolic

askyfullofstars wrote: »

I understand that. After all a seller doesn't want to hang on to a property indefinitely. But would a lender give you an approval/approval in principal if your money is in probate?
It's being dealt with by a solicitor (the whole probate) and all that remains is the house. Which has no chain/cash buyer.

It's absolutely possible, to give you my example we made an offer on a house in early June. We are now close to completion (I'd say 2-3 weeks away) and the money only physically appeared in my wife's account 3 weeks ago, as it was from an American savings account and had to be formally withdrawn by letter, as well as going through the various checks from Barclays.

The advice from my solicitors was that you must have the money in your account on the day of completion, if you don't you can incur penalties for each day you run over, or the seller can demand a fee (usually a percentage of the deposit) and resell the house.

However it can appear in your account the week before.

As long as the solicitors can debit your account on the day of completion, you'll be fine to get an AIP on funds you reliably expect to be available.