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  • FIRST POST
    • lyndabill
    • By lyndabill 12th Oct 18, 8:25 PM
    • 30Posts
    • 1Thanks
    lyndabill
    short term interest free mortgage question
    • #1
    • 12th Oct 18, 8:25 PM
    short term interest free mortgage question 12th Oct 18 at 8:25 PM
    Hello. We have 'inherited ' a house. It's in very poor condition as the owner did lots of half jobs - bit like a shell with a builder's yard inside. Proper mess. But it does have potential to do up and sell as a good house. Reckon 25k needs to be spent.
    So it has a mortgage which the tenant stopped paying so is in arrears.
    We could either sell as seen and make a little. Or remortgage for 150k which would pay the mortgage and allow for the work to be done and make a bit of profit.
    We are 60 plus. Both work. Rent a house. Good credit hx.
    Are short term interest free mortgages available?
Page 1
    • minimike2
    • By minimike2 12th Oct 18, 8:29 PM
    • 2,039 Posts
    • 1,536 Thanks
    minimike2
    • #2
    • 12th Oct 18, 8:29 PM
    • #2
    • 12th Oct 18, 8:29 PM
    Why would a lender provide you with an interest free mortgage?
    • worried jim
    • By worried jim 12th Oct 18, 8:32 PM
    • 9,716 Posts
    • 14,935 Thanks
    worried jim
    • #3
    • 12th Oct 18, 8:32 PM
    • #3
    • 12th Oct 18, 8:32 PM
    I'll have one of those interest free mortgages!
    "Only two things are infinite-the universe and human stupidity, and I'm not so sure about the universe"
    Albert Einstein
    • BoGoF
    • By BoGoF 12th Oct 18, 8:36 PM
    • 3,664 Posts
    • 3,043 Thanks
    BoGoF
    • #4
    • 12th Oct 18, 8:36 PM
    • #4
    • 12th Oct 18, 8:36 PM
    And why was the tenant paying the mortgage?
    • lyndabill
    • By lyndabill 12th Oct 18, 9:09 PM
    • 30 Posts
    • 1 Thanks
    lyndabill
    • #5
    • 12th Oct 18, 9:09 PM
    • #5
    • 12th Oct 18, 9:09 PM
    I meant an interest repayment mortgage.....
    tenants rent paid mortgage.
    • zx81
    • By zx81 12th Oct 18, 9:12 PM
    • 19,598 Posts
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    zx81
    • #6
    • 12th Oct 18, 9:12 PM
    • #6
    • 12th Oct 18, 9:12 PM
    All mortgages are interest repayment.

    Do you perhaps mean interest only?
    • amnblog
    • By amnblog 12th Oct 18, 10:03 PM
    • 10,840 Posts
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    amnblog
    • #7
    • 12th Oct 18, 10:03 PM
    • #7
    • 12th Oct 18, 10:03 PM
    Must be a massive property if you hope to raise 150,000 on a shell.
    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.
    • csgohan4
    • By csgohan4 12th Oct 18, 10:10 PM
    • 5,266 Posts
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    csgohan4
    • #8
    • 12th Oct 18, 10:10 PM
    • #8
    • 12th Oct 18, 10:10 PM
    is it mortgageable if it's a builder's yard?
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • getmore4less
    • By getmore4less 12th Oct 18, 10:48 PM
    • 33,554 Posts
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    getmore4less
    • #9
    • 12th Oct 18, 10:48 PM
    • #9
    • 12th Oct 18, 10:48 PM
    You have not inherited a house if it has a mortgage.

    Mortgage needs paying off before you inherit anything.

    If it has a tenant they are still tenants.
    • DairyQueen
    • By DairyQueen 12th Oct 18, 10:49 PM
    • 573 Posts
    • 945 Thanks
    DairyQueen
    Suggest you contact a mortgage broker. You are in the age group (55+) that would qualify for an RIO (retirement interest only) mortgage. Assuming that the house is mortgageable, you may be able to borrow in the ballpark of 60% LTV (subject to the usual credit and income checks).

    The interest rates are a little higher than a regular mortgage but this is likely to be your best bet for a short-term (1/2 year) loan.
    • Thrugelmir
    • By Thrugelmir 13th Oct 18, 12:09 AM
    • 61,269 Posts
    • 54,505 Thanks
    Thrugelmir
    We have 'inherited ' a house.
    Originally posted by lyndabill
    Mortgage needs to be discharged by the deceased's estate before you can.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • lyndabill
    • By lyndabill 14th Oct 18, 8:55 PM
    • 30 Posts
    • 1 Thanks
    lyndabill
    as you can see this is all new to me. thus the ignorance of my questions.
    I will set it out a bit better.
    We have probate on deceased relatives house. House has mortgage of about 117k. House had tenant who has now moved out. Estate agents will evaluate it shortly. It currently has ceilings removed, electrics dangling, holes....lots of shoddy half jobs. But it has potential to be finished properly and sold. Would cost about 30k to do up properly. So the question I guess is how best to finance that IF it's what we decide to do. We private rent. Some savings. Good credit history.
    • minimike2
    • By minimike2 14th Oct 18, 11:59 PM
    • 2,039 Posts
    • 1,536 Thanks
    minimike2
    OK, so it is not habitable by the sounds of it and you would be unlikely to get a normal mortgage secured on it for this reason.

    People actually lived in there like that?!?! Or did they trash it before they left?

    Anyhow, you are going to need to speak with a broker and possibly need to go down the route of bridging or development finance. Expect it to be expensive.

    I can't see any mainstream lenders agreeing anything if the ceilings are down and dangerous electrics.
    • Mutton Geoff
    • By Mutton Geoff 15th Oct 18, 3:13 AM
    • 1,247 Posts
    • 1,392 Thanks
    Mutton Geoff
    If you don't have experience or knowledge of renovating property, then I suggest you avoid it. You will not be able to make much profit from your work and since it's not your main home, you'll pay tax on your profits.


    Is there any room for an extension? Some nice architects drawings, confirmed planning approval for an extension and you can make some money selling a "doer upper". Plenty of people willing to take on the task without realising the true cost of completing the work, or professionals who have access to labour and materials cheaper than you have which is where their margin lies.


    Everything will be cheaper selling as is (or with the planning), and much better for your stress levels. How is the existing mortgage going to be settled?
    Compensation/Refunds - 4,165 | Stooz Profits - 7,636 | Quidco - 4,060 | Tax Avoidance - 107,000
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    • DairyQueen
    • By DairyQueen 15th Oct 18, 8:41 AM
    • 573 Posts
    • 945 Thanks
    DairyQueen
    Hmmm.... a property in that condition is a whole different ballgame. As others have said, it's unlikely to be mortgageable. I assume that it wasn't in this state when the mortgage was taken out. The current mortgagor will want the debt repaid.

    This doesn't appear to be a simple cosmetic job and therefore best left to the professionals. Unless there is a large potential for profit don't go near it. Don't consider doing the work yourselves.

    You will struggle to raise the finance and even if you find a lender the interest rates will be high. Servicing the debt will add cost to the project and put you under pressure to complete the work and sell quickly.

    The up-front investment and risk suggest that this would be the kind of property that a professional developer would expect to buy at auction at a suitably reduced price.

    Have you had the house valued by a surveyor? I believe that such a valuation is required in order to settle the deceased's estate. Is the house valued higher than the o/s debt despite its condition? If not, then you haven't inherited anything. Indeed, if the estate is insolvent then don't 'intermeddle' in the deceased's affairs. If you do, you may find yourself taking-on liability.
    • Lungboy
    • By Lungboy 15th Oct 18, 12:43 PM
    • 1,597 Posts
    • 1,608 Thanks
    Lungboy
    Sounds like you're better off letting the executor sell it to cover the mortgage and give you any left over cash.
    • dcfc67
    • By dcfc67 15th Oct 18, 8:08 PM
    • 53 Posts
    • 36 Thanks
    dcfc67
    Whats your credit rating like, Lots of interest free credit cards around, could use them to purchase materials for doing the place up
    • lyndabill
    • By lyndabill 15th Oct 18, 8:34 PM
    • 30 Posts
    • 1 Thanks
    lyndabill
    Yes people lived there. I don't know how!
    We have probate and thus are executors ( we as in my husband ).
    We are just looking for options as it's getting valued tomorrow in its present state and a proposed valuation when done up. We've had a decent builder estimate a reasonable costing. It could add 50k profit. So not a little bit.
    We will sell the house either way as we don't want it.
    Mortgage is about 120k.
    Just like to have ideas of how we could manage the finance as we do have some savings which could cover the renovations but not the mortgage pay off.
    • getmore4less
    • By getmore4less 15th Oct 18, 8:47 PM
    • 33,554 Posts
    • 20,296 Thanks
    getmore4less
    What was the probate valuation?

    Easiest way will be keep the house in the estate, the mortgage company should hold of if activity looking to sell.

    Do it up quickly(employ people) using savings then sell for more money.

    Be very focused on renovations that add value and make it mortgageable and can be done quickly.

    There a point in administration where you can treat the beneficial interest as passing to the beneficiaries to enable their CGT allowances to be used even though you don't assent the property to them.

    Costs and tax are going to eat into any uplift in value.
    • lyndabill
    • By lyndabill 15th Oct 18, 8:53 PM
    • 30 Posts
    • 1 Thanks
    lyndabill
    evaluation was about 170k but that was assuming good condition.
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