Mortgage on gifted property

RobChester

At the end of the year I am being gifted a property valued at £330000 and need to raise approximately £50 000 to carry out some renovation work on it, which we are planning on commencing straight after the gifting, after which myself and my girlfriend will be moving in and renting out the house we currently live in (which she owns with a £123000 on it). In terms of affordability it would not be a problem to get a £50000 equity release mortgage on the gifted property, but we have been told I need to have owned the property for at least 6 months before we can have a mortgage on it. Are there some lenders who would be able to lend before the 6 months have passed (we could fund the first month or two on savings)? We could borrow more on the existing property but the budget would be very tight and at a higher rate of interest so not ideal. Any advice appreciated!

getmore4less

It is probably possible to raise the money at the point of gifting not after.

if structured properly(to avoid losing any relief on the rental) it might be worth looking at all the borrowings the new place if you can secure a better rate and rent the other out mortgage free avoiding BTL rates or consent to let.

RobChester

Are we best going to a mortgage broker at this stage? Natwest have said that there has been a recent change in legislation meaning they can't lend prior prior to me owning the property for 6 months. Do you know if that is correct? They have said they can't port the existing mortgage onto the new property as it is being gifted, and there's also two years left at a fixed rate.

getmore4less

RobChester wrote: »

Are we best going to a mortgage broker at this stage? Natwest have said that there has been a recent change in legislation meaning they can't lend prior prior to me owning the property for 6 months. Do you know if that is correct? They have said they can't port the existing mortgage onto the new property as it is being gifted, and there's also two years left at a fixed rate.

Buy it off them for the amount you need as a mortgage/port.

Might involve a bit of SDLT if the mortgage is big enough or you are not selling the other one.

Thrugelmir

There's been a six month ownership restriction for a long time. That's to protect lenders nothing to do with the borrowers themselves.

You cannot port the mortgage across as you'll already own the property.

We could borrow more on the existing property but the budget would be very tight and at a higher rate of interest so not ideal.

Consider selling the property then. As irrespective of which property you secure the debt on you still have the money to repay.

amnblog

You are going about this in the wrong way.

There is no legal restriction on your remortgaging the property on day on but most lenders will not like it.

Crucially Nat West wont let you port your current mortgage to the new property so that is a problem.

You need to consult a mortgage broker on this one or it will go wrong, guaranteed.