Buying Inherited House

Noneforit999

Hi

I have asked a similar question before but after speaking to our lender (Lloyds), I am slightly confused.

Essentially my Wife and her Sister are due to inherit 50% each of their Grans house, probate is currently going through. Their Dad is the executor of the wills. We have agreed a purchase price of £400k so need to pay her sister £200k for her half.

I thought we could simply buy the house from the estate and mortgage the amount we needed to buy her sister out but we need some additional borrowing so instead of a £200k mortgage (my Wife's 50% being the deposit) we want to borrow £240k as the house needs some renovation work.

We have to use Lloyds due to porting and not wanting to pay the £6k ERC but they are saying we have two options.

1. Buy from the estate but we would only be able to get a mortgage for the exact amount she needs to buy her sister out, so £200k only.
2. Get the property transferred into both Siblings name and then get a mortgage which would be fine as its considered 'Capital Raising on a Mortgage Free Property'.

Option 2 is fine, we are happy to do this but does this mean we would get a normal mortgage for the 50% and then the £40k would be 'additional borrowing'?

Thanks

getmore4less

Makes no sense you can't mortgage for whatever value you like.

lookstraightahead

Have you had the house actually valued? 

Noneforit999

getmore4less said:

Makes no sense you can't mortgage for whatever value you like.

What makes no sense?

House valued at £400k for probate which is the price we are paying.

Wife has been left 50% in the will, her sister the other half.

We want to buy the house, technically we already have 50% as a deposit which has been left to my wife in a will so we would need to buy her sister out.

We need to get a mortgage to buy her sister out but we want to borrow more than the 50% my Wife is going to use as a deposit, therefore instead of 50% LTV, we would be doing 60% LTV with the 40% deposit as her part of the existing ownership of the house. 

canaldumidi

See

https://forums.moneysavingexpert.com/discussion/6328955/buying-out-sibling-from-inherited-house-questions#latest

and

https://forums.moneysavingexpert.com/discussion/6326829/buying-house-that-you-are-a-50-beneficiary-of#latest

See also the forum rules regarding repeat posting.

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