House situation - Confused

Prestonion

Hi,

I have posted before but even more confused after speaking with a lawyer and financial advisor.

My wife's grandad died last year and we are after purchasing the property

Situation 1

The executors have said we can have the property transferred into our names to save multiple transfers of ownership. But the problem is we have got 23 months remaining on a 2 year mortgage with tsb at 112000 and I think there is a 3% erc.

The other issue is I don't understand how I would pay back the executors 120000 if the property is in our name. Is it a remortgage?

Situation 2

Mother in law puts house directly into her name and buys out the other 2 executors. We then port our mortgage across. House sale has been agreed at 120000, but will be valued at 180 upon completion of renovations.

My head is all over the place.

Thanks in advance

foxy-stoat

Your saving £60,000 on the purchase so I would sell your current house ASAP and buy the other house and pay the ERC.

Are all beneficiaries happy that they will not get the full market value of the property or are you one of the beneficiaries?

G_M

You cannot 'buy out' executors. Executors simply manage the Estate. It is the Beneficiaries who need buying out.


Who are the Executors?
Who / how many are the Beneficiaries?


What is the value of the property for Probate/Inheritance Tax?
How much each do the other Beneficiaries want in return for giving up their share of the property?


You can pay them either by
* using your savings/investments if any
* selling your current property
* taking out a new mortgage, and/or

* porting an existing mortgage (and extending it if necessary)

Prestonion

Sorry they are all beneficiaries... And are all happy to sell property at 120000. We are not beneficiaries our selfs. I am guessing the executor will be the solicitor dealing with everything?

The overall plan is for my mum in law to buy the other 2 out 40k each. We then commence work on the property... Rear extensions, dorma and restoration throughout using inheritance money.

We then sell our house and re pay the mother in law.

Current value is 120000 - 130000... After work completion it will be worth 180000 as a rough estimate from our builder (cousin)

Am I over complicating it and is it straight forward to do?

Would it have to be in the mother in laws name for us to port our mortgage across?

Tom99

Prestonion wrote: »

The overall plan is for my mum in law to buy the other 2 out 40k each. We then commence work on the property... Rear extensions, dorma and restoration throughout using inheritance money.

We then sell our house and re pay the mother in law.

Does MIL have £80k available to pay the other 2? Who's inheritance money are you using to pay for the work?

Prestonion

Yes she has the available money to buy the other 2 out.

We are using my wife's inheritance money from her father passing away a couple of years ago which covers the majority of the work to make the house liveable again.

Once I have the details I can give the green light to her uncle and then get everything started.. Excited and nervous

G_M

Prestonion wrote: »

Sorry they are all beneficiaries...

so 3 beneficiaries, one of who is your MIL.

And are all happy to sell property at 120000. We are not beneficiaries our selfs. I am guessing the executor will be the solicitor dealing with everything?

Maybe. Or maybe the Executor(s) have employed the solicitor to assist them.


Is the £120,000 property the only asset, or are there other assets and if so
* are these also split between the same 3 Bnficiaries

* what are the other assets worth


I ask because a arrangement could be made whereby the other 2 beneficiearies keep the heleccopter, or yacht in France, or whatever, in return for giving up the property.


The overall plan is for my mum in law to buy the other 2 out 40k each.

So MIL pays £40K to each of the other 2 Beneficiaries. The property is trasferred into her name.



We then commence work on the property... Rear extensions, dorma and restoration throughout using inheritance money.I thought you said you were not a Beneficiary? but anyway - you finance the renovation, yes?


We then sell our house and re pay the mother in law.

OK.
What do you pay her? £120,000? or the then markett value (£180,000)?

Current value is 120000 - 130000... After work completion it will be worth 180000 as a rough estimate from our builder (cousin)

Am I over complicating it and is it straight forward to do?

Would it have to be in the mother in laws name for us to port our mortgage across?

You pay your MIL the £120,000 (or 180,000), and the property is transferred into your name. You'll also have to pay SDLT.


Whether you can port your existing mortgage depends on your lender. You my or may not need tto apply for a new mortgage.


I don't understand why you think your MIL would need to own the property for you to port your mortgage...........?????

KL0001

I situation 1, you can have the property transferred into your name, port your mortgage, borrow the further £8k from your mortgage lender (if required/possible with LTV) or finance that £8k yourself. And have your solicitor transfer the funds to the beneficiaries?

Prestonion

Sorry I am a complete newbie in mortgages hence the need for help lol.

I am not a beneficiary , we just want the property. The plan is to do the work while we still have our house to live in. The mother in law is willing to buy other 2 out and put property straight into our name as long as she can get the 120k back.

We are buying for 120k and not the value after work is complete, which we are funding our selfs. We are a very trusting family or this would not be possible.

No other assets just the house.

So if I am reading right I can have the property transferred to my name then port my existing mortgage to the house which is mortgage free and pay back my mother in law. Probably just pay her 8k so effectively the mortgage would remain 112000? Would the 112k come to my bank account then I transfer it across or would I out a charge on (solicitor mentioned this)

Your method sounds ideal kl001 as long as it is possible

Prestonion

Ps can u port if the LTV will change... Sorry for the double post

112000 mortgage with a value of 135000
To a new home 112000 with a value of 180000

Tom99

You will have to sell your existing house 1st before you can port the mortgage and pay £120k for the house.