Hi, myself and my other 2 siblings have inherited the family home. One of my siblings is living in the house and is planning to buy. They were told that their name needs to be on the deeds for 6 months before they can use it as a deposit for their mortgage. Is that right?
Inherited house as deposit
- Thread starter Mrdave
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IANAL but I doubt that you could use an asset you did not own to raise a deposit. However, the will which left him 1/3 and the valuation of the property would indicate the value he is due to inherit. But maybe he has a poor history of paying loans and the banks are too risk averse to give him a mortgage based on a promise of an inheritance. After all there is no guarantee that he will use the inheritance as a deposit once he gets it into his possession.
Could you and your other sibling give him the money for the deposit as a loan, to be paid back when he uses the house value when he becomes the legal owner. You annd your other sibling might have greater trust in your sibling than the bank. And is “deposit” the wrong word, he would not be handing ownership of his 1/3 to the bank if he drew down a mortgage?
Alternatively if that is not possible for you or your sibling, the suggest selling the house and each taking your 1/3 in cash. Then your sibling can use that money as a deposit on a different property.
Could you and your other sibling give him the money for the deposit as a loan, to be paid back when he uses the house value when he becomes the legal owner. You annd your other sibling might have greater trust in your sibling than the bank. And is “deposit” the wrong word, he would not be handing ownership of his 1/3 to the bank if he drew down a mortgage?
Alternatively if that is not possible for you or your sibling, the suggest selling the house and each taking your 1/3 in cash. Then your sibling can use that money as a deposit on a different property.
Thanks for that. They have spoken to a mortgage broker and I understand that credit history isn't an issue. They have said the broker said their name has to be on the deed for 6 months. Id imagine once on the deed it shouldn't be an issue . Trying to understand is it true that they need to be on the deed that long
Sounds odd, sure there is actually no need for a physical deposit as such, their 'deposit' which is basically the amount of the purchase price they don't have to borrow is their 1/3rd share.
If the value of the house is say 150k owned by 3 and occupant needs to buy out 2 then he needs to borrow 100k, what would he need any extra deposit amount for as it will be going to himself in theory. While they don't own it as such yet that surely will be sorted out legally when the funds are available for purchase and will be sorted by solicitors undertaking to lender.
Is it not similar as building a house on a site that you got from a parent, you can get loan approval using site value as 'deposit' but drawdown condition will be that site is put in name of mortgage holder and solicitor will undertake to do that.
Now if it's a repayment capacity issue then that's different.
If the value of the house is say 150k owned by 3 and occupant needs to buy out 2 then he needs to borrow 100k, what would he need any extra deposit amount for as it will be going to himself in theory. While they don't own it as such yet that surely will be sorted out legally when the funds are available for purchase and will be sorted by solicitors undertaking to lender.
Is it not similar as building a house on a site that you got from a parent, you can get loan approval using site value as 'deposit' but drawdown condition will be that site is put in name of mortgage holder and solicitor will undertake to do that.
Now if it's a repayment capacity issue then that's different.
Talk directly to AIB or Bank of Ireland (or even the local credit union)
A solicitors letter based on the will should suffice. The other option is for the home to be registered in the 3 names and then the sibling keeping the house buys out the other two at that point.
It may involve some fees and stamp duty, but if the solicitor knows what end result is aimed towards, it will minimise the fee. I think the sibling keeping the house will need a separate solicitor - but that solicitor could recommend one they work well with.
A solicitors letter based on the will should suffice. The other option is for the home to be registered in the 3 names and then the sibling keeping the house buys out the other two at that point.
It may involve some fees and stamp duty, but if the solicitor knows what end result is aimed towards, it will minimise the fee. I think the sibling keeping the house will need a separate solicitor - but that solicitor could recommend one they work well with.
Brendan Burgess
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Hi MrDave
What are you trying to do?
Is Dave trying to buy out Mary and Joe from the house they have inherited?
Or is Dave trying to buy another house while keeping his share of the inherited house?
Assuming it's the former, does it matter that much if there is a 6 month delay? Mary and Joe will just have to wait.
Brendan
What are you trying to do?
Is Dave trying to buy out Mary and Joe from the house they have inherited?
Or is Dave trying to buy another house while keeping his share of the inherited house?
Assuming it's the former, does it matter that much if there is a 6 month delay? Mary and Joe will just have to wait.
Brendan