Using inheritance from a lifetime mortgage.
Options
MarvelousMsG
Posts: 1 Newbie
Hi!
My grandparents took out out a lifetime mortgage on their home. Due to internet its currently around 30% of market value.
I would like to be able to perchase the house when they go as they self built.
I have worked out I can afford it if I can combine the equity from the sale of my current home (brought with ex) with the inheritance.
However does the lifetime mortgage need to be paid off and the house go on the open market first as there are other beneficiaries?
Trying to avoid a bridging loan.
My grandparents took out out a lifetime mortgage on their home. Due to internet its currently around 30% of market value.
I would like to be able to perchase the house when they go as they self built.
I have worked out I can afford it if I can combine the equity from the sale of my current home (brought with ex) with the inheritance.
However does the lifetime mortgage need to be paid off and the house go on the open market first as there are other beneficiaries?
Trying to avoid a bridging loan.
0
Comments
-
No, the house does not need to go on the open market first, but the Executors of the estate will decide how the property is dealt with. If you wish to buy the other beneficiaries out, that will have to be acceptable to all concerned.
Final tip, get a mortgage broker in early as properties in and out of Probate and changing ownership will cause mortgage complications.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
What's the rate of interest on the lifetime mortgage and how old/infirm are your grandparents? The outstanding balance could escalate swiftly due to roll-up of the interest so there may not be much inheritance for you when the time comes...0
-
The rule of 72 is a good for this situation.I have worked out I can afford it if I can combine the equity from the sale of my current home (brought with ex) with the inheritance.
what do you think your inheritance will be?However does the lifetime mortgage need to be paid off
yes, net input to the estate is what's left after the mortgage is paid off
The house does not form part of the estate only the free equity does.
There may be other clauses in the equity release that are not favourable that would need checking.house go on the open market first as there are other beneficiaries?
does not have to go on the market but a fare market value should be used as that is what you should pay for it.
From that the mortgage gets paid off and you get your share of the inheritance from that(you need to hand over your cash to pay of the others.
If you buy from the estate it can be just like any other house purchase
As there is going to be consideration there is likely to be a SDLT bill.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards