Multiple people on deeds but sole mortgage?

Sg2019

Hello all, I hope you're all well.

I was wondering if you could offer some advice on whether the below is possible.

My wife's nan passed away and has left her property (mortgage free) to five people. My wife now has 1/8 of the property and estate. She would like to use this as a deposit to buy some the property,. Two of the beneficiaries would like to leave their shares in, both 1/4 each.

The property is valued at £230,000. Her share of the property is worth £28,750. And so effectively needs to get a mortgage of £86,250. One mortgage broker said its not possible as there will be three people on the title deeds but only one with a mortgage.

Is there a way of getting around this? I'm sure this situation is really common so there must be a solution?

Many thanks in advance

danlewi2

So your buying out the other people ? or your buying another property?

davidmcn

Technically it's possible, but all the owners would need to sign the deed in order to create a charge over the whole property (the bank can't realistically repossess and sell half a house) - so would the other joint owners be happy to put their shares at risk if your wife fails to keep up her mortgage payments? Even if they were, it's a regulatory headache which is why banks don't typically offer it.

Can't your wife borrow elsewhere e.g. against an existing property she owns?

What's the property going to be used for anyway?

Sg2019

She doesn't own a property. She currently lives with me.

She's buying it solely for us to live in. I would go on the mortgage too but at the moment I have a horrific credit report etc so we're just doing her solely.

csgohan4

may be better selling as 1/8 or 1/4 of the rent being generated isn't that much plus the headache of tax and legal implications for being a LL

Sg2019

Yes. She's buying the property but buying two people out. The other two are remaining.

fairy_lights

Sg2019 wrote: »

Yes. She's buying the property but buying two people out. The other two are remaining.

So she needs a mortgage to buy two people out, and then pay that mortgage back every month as well as paying rent to the remaining two shareholders?
Who will take responsibility for any repairs that are needed? What happens if 6 months down the line one of the other shareholders wants out? Sounds like it could get messy and expensive.

danlewi2

Just sell it - take your shares

Marvel1

Sounds like a nightmare in the future.

Sg2019

The other two shareholders are her mother and uncle. Both agreed no rent needs to be paid to them. Any repairs etc will be down to my wife. They've both agreed to keep the money in until she decides to sell.

Edi81

What if they need to sell before your wife is ready?
What if one of them needs to go into care and this is considered part of the estate?
Family falling out?

This has so many issues that you really need to understand all the variations of what could happen.