First time mortgage on gifted house?

henrietta

Hi All,

I am in the lucky position to have been gifted a house from my parents. They inherited it about 15 years ago and I and my children have been living in it for the last 10 years. Originally it was to be mine in my parents' will but they have now decided to gift it to me now rather than wait until they pass away. I am forty and they are mid sixties.

I can't remember the exact value of the house but probably just over €100k. (It is in rural Ireland).

Anyway my question is would it be possible for me to take out a mortgage on the property of say €50/60k? Assuming I can make repayments etc. I would like to maybe convert the attic etc. Would I need a 'deposit' as such or certain level of savings? Its not a remortgage but not really a first time buyer either? I know you can get personal loans for that amount but the rate and repayments are higher. I have never had a mortgage or owned a property.

I have looked through the banks websites and google but can't fine an answer to my specific question. Don't want to waste mine and the banks time going in for a meeting if what I'm looking for is a complete non runner.

thanks in advance for any advice.

Trish56

Yes you should be able to borrow for home improvements subject to you qualifying for the amount sought. Under Central Bank regulations you can borrow up to 3.5 times your gross basic salary subject to meeting the lenders credit policy and criteria. You will need to be able to prove repayment capacity so need to show savings equal to the stressed repayment.

Your best bet would be to talk to a good mortgage broker who will be able to advise you and also to a Solicitor if the house is not yet transferred into your name yet.

henrietta

Thank you for that I just wasn't sure if I could get a mortgage when I wasn't actually buying a house or re-mortgaging.
The transfer is almost complete with the solicitors but my parents have been doing most of the work there, I haven't been speaking to the sols yet. Maybe I'll mention it to them when I eventually go in to sign or whatever.

I hadn't really thought of a broker so that's a good idea.
Thanks again.

Ace2007

I’m sure your aware of this but your parents may have to pay CGT on the property given that it’s not their residence.

While you can receive and pay no tax on the property, they are liable for the captain gains element - so they will have to make some sort of disclosure to revenue even if they think it’s nil - revenue could easily take a different view and worse case scenario is for the house to be signed over with no payment from yourself and your parents left with a tax bill they can take afford.

henrietta

My parents have already spoken with their accountant so think they should be ok on that front. It hasn't appreciated much in value since they inherited it themselves.
I have in my head though that if there was any significant tax bill I would pay it for them.
If I was getting a loan I could maybe factor that into how much I would borrow too.
Its good to try be aware of all possible pitfalls though so thank you.