mortgage to purchase siblings share of house - property has equity release loan

efes_shareholder

My mother is terminally ill , diagnosed just as I was about to embark on a house purchase. 
Thinking ahead I'd like to retain and purchase her house.
Background.
The house is worth approx 340k and is left in my mums will jointly to myself and my sibling.
The house has an equity release loan and my mother has some personal credit card debt , totally around 60k collectively which would need to be paid by the estate.
My position
I have 130k from the sale of my marital home and currently reside with my mum and give care. i earn 27k a year and when I was seeking advice on mortgages was told I could borrow around 130 however this was with me putting a large deposit down ( was looking to buy at around 250k)
What I envisaged
Ideally what I would like is to retain my mums house and live here and own it exclusively , I have the means to clear the debts against the estate and once these are paid I calculate I would need to provide my sister with 140k to obtain her share. In my head I could find 60k from my 130k in savings to get the debts of off our backs. I would then look to obtain a mortgage of around 130k and top it up with a further 10k to acquire my sisters share. This would leave me with around 60k to carry out remedial and upgrade works which are required as the house is in a state of neglect and in my opinion would need a replacement bathroom and cloakroom to make it at least marketable.
Cloudy water
i've spoken to a friend who deals in finance and he is off the opinion that I would need to put down extra cash to obtain the 130k mortgage and that my inherited share of the house would not be considered as a deposit against the mortgage , I've also spoken to another who thinks its as straight forward as me seeking a mortgage for 130k and doing things as i've envisaged so I am slightly confused.
If I technically own 50% of the house , do I need to put extra cash in to secure a mortgage against it ?
It is slightly sensitive as for the moment mum is here and has all of her wits , we know her time is limited but we don't know a timescale , as I was looking to buy when we recieved the diagnosis and circumstances have put a halt on this , I am trying to think ahead and ascertain if what I would like to do in the future is viable..........
By my estimations , I would need in the region of 40k accessible when all signed , sealed and delivered in order to carry out works and have an emergancy fund

amnblog

yes, technically you can buy the property from Mum with a cash deposit.
Mum would need to adjust her Will to suit her bequest to your sister which would be the cash.
The concern would be , is the property mortgageable in its current condition.

efes_shareholder

amnblog said:

yes, technically you can buy the property from Mum with a cash deposit.
Mum would need to adjust her Will to suit her bequest to your sister which would be the cash.
The concern would be , is the property mortgageable in its current condition.

hi
Thanks for the response , the property would be mortgageable   it was cleared for the equity release 3 years ago. It isn't falling down , its just generally neglected and needs a complete renovation.
Don't really want to tamper with the will / house right now , mums reluctant to change anything she has in place and cant discuss things at any length.
Its really whether my stake in equity will be treated as deposit ?

MWT

Sorry to hear the situation you are in.

However you look at this, assuming you are waiting to do anything until after her demise, and assuming your sibling has no objections, you will be putting cash into this alongside the mortgage, but it should just be the £60K+£10k, as you will not directly use the £60k to clear the mortgage and debts it just forms part of the purchase of the portion of the house you are not already entitled to under her will.

There are some delicacies of timing to keep in mind.

If your mother has to go into care and is not residing at home then that starts the clock on the repayment requirement for the equity release mortgage so do try to find the details on that so you know what you can expect.

If the timing is such that the clock runs our while she is still in care then although you have the cash to clear it, take care how you do that as you need to protect your interest by securing the money against the property.

Does your mother have a Lasting Power of Attorney in place?

For practicality it would be good if she did as you and your sibling may have to make some decisions for her depending on how things go from here...

efes_shareholder

MWT said:

Sorry to hear the situation you are in.

However you look at this, assuming you are waiting to do anything until after her demise, and assuming your sibling has no objections, you will be putting cash into this alongside the mortgage, but it should just be the £60K+£10k, as you will not directly use the £60k to clear the mortgage and debts it just forms part of the purchase of the portion of the house you are not already entitled to under her will.

There are some delicacies of timing to keep in mind.

If your mother has to go into care and is not residing at home then that starts the clock on the repayment requirement for the equity release mortgage so do try to find the details on that so you know what you can expect.

If the timing is such that the clock runs our while she is still in care then although you have the cash to clear it, take care how you do that as you need to protect your interest by securing the money against the property.

Does your mother have a Lasting Power of Attorney in place?

For practicality it would be good if she did as you and your sibling may have to make some decisions for her depending on how things go from here...

No , there is no power of attorney , mum has terminal pancreatic cancer , diagnosed 3 months ago and to be honest wasn't expected to survive more then a few weeks on diagnosis so it wasn't put in place , here we are three months on with no further indication of how we expect the wheel to turn however she is being cared for at home and if there was a change to that it would only be to a macmillan hospice. 
Fully expecting to have to use 60k of my money to clear the debts related to the estate , deducting 30k of this from what would be due to my sister. I'm getting conflicting advise on the the mortgage , some are saying I would need to inject further cash as a deposit and others are saying my share of the house would count as this.
Whether I can retain the house very much depends on the requirements of the mortgage.

MWT

efes_shareholder said:

Fully expecting to have to use 60k of my money to clear the debts related to the estate , deducting 30k of this from what would be due to my sister. I'm getting conflicting advise on the the mortgage , some are saying I would need to inject further cash as a deposit and others are saying my share of the house would count as this.

I'm sure one of the brokers can give you some comfort on that, but the bit you need to keep in mind is that you will not be using £60k of your money to clear the debts, you will be using it as part of your purchase of the house from her estate.

The executors of her estate will then use the proceeds of the sale to clear the debts and provide cash to your sibling.

So the total of £70k you plan to put in alongside the mortgage of £130k, to purchase part of the house that is not yours under the will, is your deposit...

efes_shareholder

MWT said:

efes_shareholder said:

Fully expecting to have to use 60k of my money to clear the debts related to the estate , deducting 30k of this from what would be due to my sister. I'm getting conflicting advise on the the mortgage , some are saying I would need to inject further cash as a deposit and others are saying my share of the house would count as this.

I'm sure one of the brokers can give you some comfort on that, but the bit you need to keep in mind is that you will not be using £60k of your money to clear the debts, you will be using it as part of your purchase of the house from her estate.

The executors of her estate will then use the proceeds of the sale to clear the debts and provide cash to your sibling.

So the total of £70k you plan to put in alongside the mortgage of £130k, to purchase part of the house that is not yours under the will, is your deposit...

I am excuator to the will. It sounds like how i envisaged it to work out isn't too far from how it will be

MWT

Being executor adds a few wrinkles, are you the sole executor? ... and will your sibling consent your purchase of the property?

Also are there any other bequests or legacies, as you should seek the consent of all beneficiaries if you wish to purchase assets from the estate while remaining executor.

If you are not the sole executor then you could consider stepping down as executor to avoid the risk of any conflict.

efes_shareholder

MWT said:

Being executor adds a few wrinkles, are you the sole executor? ... and will your sibling consent your purchase of the property?

Also are there any other bequests or legacies, as you should seek the consent of all beneficiaries if you wish to purchase assets from the estate while remaining executor.

If you are not the sole executor then you could consider stepping down as executor to avoid the risk of any conflict.

I'm joint with my sister , she knows of my wishes but we haven't discussed it at any great length

MWT

efes_shareholder said:

MWT said:

Being executor adds a few wrinkles, are you the sole executor? ... and will your sibling consent your purchase of the property?

Also are there any other bequests or legacies, as you should seek the consent of all beneficiaries if you wish to purchase assets from the estate while remaining executor.

If you are not the sole executor then you could consider stepping down as executor to avoid the risk of any conflict.

I'm joint with my sister , she knows of my wishes but we haven't discussed it at any great length

Now may not be the time, but that is a conversation you will have to have at some point before you personally start taking decisions as an executor and may be affected by the full content of the will if you are not already aware of everything it contains.

efes_shareholder

MWT said:

efes_shareholder said:

MWT said:

Being executor adds a few wrinkles, are you the sole executor? ... and will your sibling consent your purchase of the property?

Also are there any other bequests or legacies, as you should seek the consent of all beneficiaries if you wish to purchase assets from the estate while remaining executor.

If you are not the sole executor then you could consider stepping down as executor to avoid the risk of any conflict.

I'm joint with my sister , she knows of my wishes but we haven't discussed it at any great length

Now may not be the time, but that is a conversation you will have to have at some point before you personally start taking decisions as an executor and may be affected by the full content of the will if you are not already aware of everything it contains.

Hi , have spoken about it and she knows my intentions. I also have read the will , the estate is split equally between my sister and I with just a small donation to an animal charity to cover.
Mum has asked us personally to send a small amount to another party however this is not included in the will , as she has requested it this will be taken care off