Loan to buy siblings out of inherited property

[schnozzlepants]

Hello, we're doing a bit of estate planning here and wondering.... what are the chances that a couple in their late 50s to 60s with a reasonable income would be able to obtain a loan to buy out the residual share of the siblings in an inherited home? The loan would be for a small proportion of the value of the home.

Would the only option be mortage loans? If so, would it be a traditional, income-based assessment of borrowers with no consideration of the loan to value of the property? Would any institutions in Ireland offer personal loans for this kind of situation?

Advice much appreciated.

 

[KOW]

Hello, we're doing a bit of estate planning here and wondering.... what are the chances that a couple in their late 50s to 60s with a reasonable income would be able to obtain a loan to buy out the residual share of the siblings in an inherited home? The loan would be for a small proportion of the value of the home.

Would the only option be mortage loans? If so, would it be a traditional, income-based assessment of borrowers with no consideration of the loan to value of the property? Would any institutions in Ireland offer personal loans for this kind of situation?

Advice much appreciated.

Hi there can you throw out a few figures please.

 

[Brendan Burgess]

Spry Finance might be the best option

How much can be borrowed from Spry Finance

How much can I borrow? You can borrow a minimum of €20,000 and maximum of €500,000 from Spry Finance depending on your property value and age

www.spryfinance.ie

They will lend you 15% of the value of the home if you are 60.

You can let the interest roll up i.e. you don't need to make any payments. Or you can pay the interest each year.

Brendan

 

[Brendan Burgess]

Another option if the siblings are open to it, would be to borrow the money from the siblings.

And gradually pay it back.

Brendan

 

[NoRegretsCoyote]

A mortgage loan would be simplest and cheapest of course.

Other options are possible but more expensive.

It would be helpful if you outlined any constraints which would interfere with the mortgage option: other personal or business borrowings, employment status, etc.

 

[schnozzlepants]

Thanks lads. Hard to talk about numbers, no valuations done, maybe 2-300k against a home value of 1.3m?
Problem with the latter idea, Brendan, which I had thought of earlier, is legal enforceability. That'd be complicated, as I understand it.
Thanks for the info on Spry, also. Traditional mortgage would be a nonstarter do you think given the age range?

 

[NoRegretsCoyote]

Traditional mortgage would be a nonstarter do you think given the age range?

It depends totally on your income, employment, and other borrowings. Age is not an impediment on its own.

If you are going to be coy about these things you won’t get useful advice.

Problem with the latter idea, Brendan, which I had thought of earlier, is legal enforceability. That'd be complicated, as I understand it.

It’s perfectly enforceable, it just depends in willingness of siblings to take legal action if there’s a default.

 

[RedOnion]

Traditional mortgage would be a nonstarter do you think given the age range?

Do they have a take home pay in excess of 7k per month?
Are they employees or self employed?
Do they have solid pensions? Will there be a large pension lump sum that can be accessed soon?
Is the house to live in, a holiday home, or to rent?

 

[Clamball]

Thanks lads. Hard to talk about numbers, no valuations done, maybe 2-300k against a home value of 1.3m?
Problem with the latter idea, Brendan, which I had thought of earlier, is legal enforceability. That'd be complicated, as I understand it.
Thanks for the info on Spry, also. Traditional mortgage would be a nonstarter do you think given the age range?

In terms of a traditional mortgage, if you can cover interest and capital on €100K over the 6 years until you retire from your income and show proof that you can draw down max of €200K on retirement, then why not see what the banks offer?