Mortgage - Family Home

antodeco

Hi all,
I'll try keep this short.

My wife is being given their family home by her father. He intends to live with us for the rest of his life.

She has lived in this house her whole life. She has 3 brothers.

In order to get the house transferred across, we must "buy out" her brothers. They are happy with the amount being offered. We will be using all of our savings to cover this payment.

We want to build an extension once the house is transferred, but we will require a large amount.

What my question is, are we considered first time buyers, or is it a different type of mortgage we will require?

Does the process change at all, as we are going to own the house outright (with no payments on it),before we apply for finance? Also, will not having any savings, from the buyout above, affect our ability to get a mortgage?

Thanks

Atlantic Dawn

I think it would be more a home improvement loan you would be looking for.

I would get legal advice on the tax implications of the transfer, in an ideal world the house should be transferred to your wife and her 3 brothers at the same time, she then buys them out, otherwise she may be liable for tax if it on paper looks like your father just gave her the house.

ainy

We are in a similar position my partner will be getting his family home soon although doesn't need to buy out his siblings as his mum was only ever leaving it to him anyway. she will live with us and we'll build a two storey extension. We have enquired with the bank and gave our situation and they said we would be considered the same as a self build mortgage and first time buyers so would need 10% deposit and a 10% contingency fund for approval. even though we would own the property outright. hope that helps.

Trish56

antodeco wrote: »

Hi all,
I'll try keep this short.

My wife is being given their family home by her father. He intends to live with us for the rest of his life.

She has lived in this house her whole life. She has 3 brothers.

In order to get the house transferred across, we must "buy out" her brothers. They are happy with the amount being offered. We will be using all of our savings to cover this payment.

We want to build an extension once the house is transferred, but we will require a large amount.

What my question is, are we considered first time buyers, or is it a different type of mortgage we will require?

Does the process change at all, as we are going to own the house outright (with no payments on it),before we apply for finance? Also, will not having any savings, from the buyout above, affect our ability to get a mortgage?

Thanks

You will need to check with your lender or Solicitor if they will grant you a mortgage with your Dad having a right of residence...I think he may have to sign away his right of residence or else join in the mortgage which could affect the term of the mortgage.

Your application for funding for the extension should be treated as first time buyers and the amount of mortgage will be based on the loan to value on completion. You will need to get detailed costing's and have a qualified Architect/Engineer to supervise the construction. You will also need to have planning permission in place before applying for a mortgage.

Regarding making payments to the brothers and getting the property transferred into your names ensure all of this is done through a good Solicitor.

Ggkoy

ainy wrote: »

We are in a similar position my partner will be getting his family home soon although doesn't need to buy out his siblings as his mum was only ever leaving it to him anyway. she will live with us and we'll build a two storey extension. We have enquired with the bank and gave our situation and they said we would be considered the same as a self build mortgage and first time buyers so would need 10% deposit and a 10% contingency fund for approval. even though we would own the property outright. hope that helps.

Hi - Did you proceed with this? Just wondering if you encountered any issues.
Very early stages but looking for advice as we will be in a similar situation. My partner will be added to the deeds of her parents house, they will continue to live here. We are looking to build on an extension, approx 80 sq m. to be used as a separate living area for ourselves.
Any idea if it will be possible for us to get a joint mortgage for this (is this an option when my name is not tied to the house)?

ainy

Ggkoy wrote:

Hi - Did you proceed with this? Just wondering if you encountered any issues. Very early stages but looking for advice as we will be in a similar situation. My partner will be added to the deeds of her parents house, they will continue to live here. We are looking to build on an extension, approx 80 sq m. to be used as a separate living area for ourselves. Any idea if it will be possible for us to get a joint mortgage for this (is this an option when my name is not tied to the house)?

Hi, we have gone through it fully now, and completed our build. The ownership was transferred fully to both of us with a right of residency clause added so that his mum has a legal right to live out her years here. We then got a joint mortgage for the property. I'm not sure if they will lend to both of you if your name is not on the property also, it would be worth talking to the bank to find out exactly what they will or won't allow.