Buying house from estate

JohnFTB

I'm looking to buy my dads house from his estate, the house is still in his name. Question is can I use my share of estate as a deposit? Example is the house is £240,000, my share would be £40,000 once sold so could I get a £200,000 mortgage without having to find the £40,000 first.

Any stamp duty considerations?

Thanks

xylophone

Is the executor of the estate in agreement?

Have you applied for a mortgage on the property?

The executor could agree to transfer the property to you for a sum that took into account your inheritance.

JohnFTB

xylophone said:

Is the executor of the estate in agreement?

Have you applied for a mortgage on the property?

The executor could agree to transfer the property to you for a sum that took into account your inheritance.

Price is agreed, not applied for mortgage yet but will probably be porting my current mortgage over and just getting everything crossed off before contacting mortgage company.

I suppose the price could be lowered so that I get my inheritance via the house rather than cash from the sale. The wording of the will might mean we need legal advice to cover other beneficiaries in that circumstance. 

YellowCarBlueCar

Stamp duty will be payable for the amount of money transferred - so £200,000 in your example.

The mortgage company don't really care whether the 'deposit' is actually handed over in cash, or taken into account as a reduction in the amount paid* so long as the loan to value ratio of the mortgage is the agreed amount (the remainder of the ratio is normally accounted for by the deposit).

Don't assume that this will be a straightforward 'port' - I nearly gave up with First Direct/HSBC as it became so difficult.
-I was happy to buy-out the estate's share with the equity in my house, then port the loan.  This was not allowed because I couldn't port to an unencumbered property, which would have then been the case.
-I couldn't simply get the land registry entry changed from my late father's name to mine as part of the conveyancing, as they required me to assent the title from my late father's name to the executor's names first (one of which was me).  Additional LR fees and delay.
-This brought up the unencumbered property issue again, as I was now on the title for the property that I wished to port to, so had to make a fuss that I was only doing as they had instructed.
-This also made me fall foul of the bank's 'six month rule' where they won't lend on a property which has changed hands in the last six months - had to get quite stroppy again about this as again it was a consequence of following their instructions.
-the '*' bit from above - at the last hurdle, they wanted my solicitor to list the full value (from their desktop valuation) on the certificate of completion, which he wasn't happy to do as it didn't reflect the price paid.  This delayed completion by a week while they agreed wording which they were both happy with.

If it wasn't for a lifetime tracker rate which is way better than anything available at the moment I think I'd have given up, so do check with your lender before assuming it will be easy.

JohnFTB

YellowCarBlueCar said:

Stamp duty will be payable for the amount of money transferred - so £200,000 in your example.

The mortgage company don't really care whether the 'deposit' is actually handed over in cash, or taken into account as a reduction in the amount paid* so long as the loan to value ratio of the mortgage is the agreed amount (the remainder of the ratio is normally accounted for by the deposit).

Don't assume that this will be a straightforward 'port' - I nearly gave up with First Direct/HSBC as it became so difficult.
-I was happy to buy-out the estate's share with the equity in my house, then port the loan.  This was not allowed because I couldn't port to an unencumbered property, which would have then been the case.
-I couldn't simply get the land registry entry changed from my late father's name to mine as part of the conveyancing, as they required me to assent the title from my late father's name to the executor's names first (one of which was me).  Additional LR fees and delay.
-This brought up the unencumbered property issue again, as I was now on the title for the property that I wished to port to, so had to make a fuss that I was only doing as they had instructed.
-This also made me fall foul of the bank's 'six month rule' where they won't lend on a property which has changed hands in the last six months - had to get quite stroppy again about this as again it was a consequence of following their instructions.
-the '*' bit from above - at the last hurdle, they wanted my solicitor to list the full value (from their desktop valuation) on the certificate of completion, which he wasn't happy to do as it didn't reflect the price paid.  This delayed completion by a week while they agreed wording which they were both happy with.

If it wasn't for a lifetime tracker rate which is way better than anything available at the moment I think I'd have given up, so do check with your lender before assuming it will be easy.

Sounds a nightmare!

Not sure whether it will make a difference but think it might be easier for me to pay the early repayment fee and use another lender.  I'll get the fee back by getting a better deal elsewhere. Using a mortgage broker who knows the score on this situation might help get a  more flexible lender.