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Would appreciate any advice whatsoever after parent died intestate.

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Would appreciate any advice whatsoever after parent died intestate.

edited 30 November -1 at 12:00AM in Deaths, Funerals & Probate
7 replies 801 views
Marshall218Marshall218
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edited 30 November -1 at 12:00AM in Deaths, Funerals & Probate
I apologise in advance for what may be stupid questions to ask; I, unfortunately, do not understand anything about how this sort of thing works and I did not envisage having to deal with this situation.

My mum died intestate and has left an amount of debt totalling to around £65,000, of which around £37,000 is the mortgage on her house.

I am her only child and she died single so I have been made the executor of her estate. I have had her house valued at £105,000.

I would like to move into the property. I have had bad credit in the past (defaulted on an account as recently as three years ago) but am now debt-free and currently have £30,000 in savings.

Providing I can get a mortgage with a deposit of £30,000, would I have to buy the house for £105,000 as per the valuation? Would this not mean that as the sole beneficiary of the estate, once the property has been sold and the debts have been paid, the remaining money from the sale (around £30,000 to £40,000) would just be given back to me?

Replies

  • MovingForwardsMovingForwards
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    You don't have to 'buy' the house from the estate as you are the only beneficiary, you just need to mortgage the property enough to cover you mom's outstanding mortgage and any other debts.

    Speak with a whole of market mortgage broker to see what lenders are available to you.

    My condolences for the loss of your mom.
  • You don't have to 'buy' the house from the estate as you are the only beneficiary, you just need to mortgage the property enough to cover you mom's outstanding mortgage and any other debts.

    Speak with a whole of market mortgage broker to see what lenders are available to you.

    My condolences for the loss of your mom.

    Thank you for your advice and your kind words. It is really appreciated.

    Just so I am clear, I could put down a deposit of £30,000 and get a mortgage for £65,000, pay off the debts and then I would own the property with a mortgage of £35,000?
  • MovingForwardsMovingForwards
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    Thank you for your advice and your kind words. It is really appreciated.

    Just so I am clear, I could put down a deposit of £30,000 and get a mortgage for £65,000, pay off the debts and then I would own the property with a mortgage of £35,000?

    Potentially you are looking to borrow £40k, use £25k of your savings, £2k legal fees, moving fees. Leaving you with £3k breathing fund to decorate, buy carpets, bits of furniture or just keep it in the bank.

    If you speak with a good broker (I would post on the mortgage board and see what the adverse brokers suggest), they will let you know your options.

    You may only need 10% deposit, or it could be 15 - 25% it depends on what your bad credit history is :)

    I am assuming you are working and have about £18k salary, no children or with partner / kids but both are working.
  • MovingForwardsMovingForwards
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    https://forums.moneysavingexpert.com/forumdisplay.php?f=15

    Post on this board and the brokers will be able to comment.
  • TBagpussTBagpuss
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    You don't need a mortgage of £65,000 in the first place if you already have £30K savings. You only need £65,000 in total, including your savings, t clear your mum's debt.

    So the way to go would probably be to apply for a mortgage of £39,000* to clear your mum's mortgage (and at the same time, transfer the house to your name), and use your £30,000 to clear the other debts your mum had.

    That leaves you with a £39K mortgage on a house worth £105k - you don't need to pay a separate deposit as you have the equity in the house already. It's the equivalent of putting down a deposit of £66,000.

    * technically you could get a mortgage for £35K, and use the last £4K of your savings towards paying off the mortgage, but in reality you will probably have other expenses, such as legal costs, so you may find that it makes sense to borrow the full £39K and have a bit of leeway for unexpected costs / emergencies
    .
    All posts are my personal opinion, not formal advice Always get proper, professional advice (particularly about anything legal!)
  • Appreciate the response so much, TBagpuss, but would I really not require a deposit considering my bad credit history?
  • OzzukOzzuk
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    Appreciate the response so much, TBagpuss, but would I really not require a deposit considering my bad credit history?

    Your share in the house is the deposit...you just need enough money (savings/own mortgage) to clear the debt/mortgage if you want to keep it.
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