Possible to get a mortgage when not on deeds?

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BigProblem

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Hi, i was wondering if it is possible to get a mortgage in Ireland when my name or my wife is not on deeds.

we are living in my wife's mothers house which she is leaving to my wife in her will. we are looking at building an extension and an upgrade to the interior of the house. my mother in law has offered to put the deeds up as collateral for the loan, will any bank in Ireland provide us with a mortgage if our names are not on the deeds? i have contacted AIB and BOI - both have said no. we would be looking for €250-300k

It doesnt make sense for mother in law to gift the house to my daughter as house is worth over €650k as there would be CGT implications and gift tax to pay. Any advise on what we can do would be greatly appreciated? thank you.
 
Not really, you have nothing to give as security. Your mother in law putting up the deeds is just not a done thing, think about it, bank has to reposess house, goes to court, putting MIL out of her home, won't go down well with a judge! Bank is always thinking of worst case scenario in lending.

Years ago how we would have dealt with that was 3 people on the mortgage, one on deeds but I don't think that is done anymore either since Celtic Tiger death as many parents got caught when the kids couldn't pay.

You won't get a personal loan for that amount either without security or at a good rate.

Legal/tax advice as to best way to transfer house I'd say is only option, then again MIL will surely have 'right of residence' which sometimes banks don't like either when it comes to a mortgage.
 
Monbretia said:
Not really, you have nothing to give as security. Your mother in law putting up the deeds is just not a done thing, think about it, bank has to reposess house, goes to court, putting MIL out of her home, won't go down well with a judge! Bank is always thinking of worst case scenario in lending.

Years ago how we would have dealt with that was 3 people on the mortgage, one on deeds but I don't think that is done anymore either since Celtic Tiger death as many parents got caught when the kids couldn't pay.

You won't get a personal loan for that amount either without security or at a good rate.

Legal/tax advice as to best way to transfer house I'd say is only option, then again MIL will surely have 'right of residence' which sometimes banks don't like either when it comes to a mortgage.
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thank you for your reply. Sorry it is not my MIL place of residence she has her own home. the house we are living in is an investment property of MIL - does that change the situation re having to put MIL out of home?
 
BigProblem said:
thank you for your reply. Sorry it is not my MIL place of residence she has her own home. the house we are living in is an investment property of MIL - does that change the situation re having to put MIL out of home?
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Slightly less complicated if she has another residence as sge won't need 'right of residence' if property is transferred to you so more mortgageable but still think it's unlikely that a bank will issue a mortgage in 3 names and 1 on deeds these days.
 
ClubMan said:
What situation re having to put the mother in law out of (her?) home?!?
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There is no situation as such, just looking at it from bank point of view if the loan went belly up then they'd be looking at putting I presume an older person out of their home on repossession which would be one of the reasons a bank would not be inclined to add her as 3rd mortgage holder or guarantor. However as OP has clarified it's not her home so no issue now on that side.
 
BigProblem said:
It doesnt make sense for mother in law to gift the house to my daughter as house is worth over €650k as there would be CGT implications and gift tax to pay.
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How much did the mother pay for the house in the first place and when did she buy it?

If she gifts your wife the house, she will have CGT liability and your wife will have a CAT liability.
But as the two liabilities arise from the same event, your wife can set the CGT paid against her CAT liability.
This will only help a bit as your wife will have to use up the €335k CAT threshold first.

How much is the mother's family home worth? And what age is she?
She could take out a Life Loan with Spry

Key Post - Spry Finance Lifetime Loans

I find the Spry Finance website complicated so this is my summary of it. If you are at least 60, you can take out a Lifetime Loan from Spry Finance. There are no other providers in the Irish market which is a pity. You do not have to make any repayments, they will roll up the interest. The...
www.askaboutmoney.com

For example, if she is 80 and has a house worth €1m, she could raise 35% of the value or €350,000.
The interest rate is high but at least you would get a loan.

Brendan
 
Thanks Brendan for the response.

She bought in 1972 and price converted to euros was €86k. We did have our accountant look at the numbers and between CAT and CGT it would be approximately 200k tax bill which on top of an extension would be too expensive for us.
Mother in law is 79 and her family home is worth 800k. I will contact spry so. What happens the loan when mother in law passes - can my wife and I continue to pay?
 
BigProblem said:
Thanks Brendan for the response.

She bought in 1972 and price converted to euros was €86k. We did have our accountant look at the numbers and between CAT and CGT it would be approximately 200k tax bill which on top of an extension would be too expensive for us.
Mother in law is 79 and her family home is worth 800k. I will contact spry so. What happens the loan when mother in law passes - can my wife and I continue to pay?
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My parents paid IEP 7,300 for a 3 or 4 bedroom semi in a provincial town 40 miles from Dublin in 1973 approx.

EUR 86,000 is equivalent to 67,500 Irish pounds, so this must have been a mansion in Foxrock or something!!!
 
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There is something wrong with the estimates here.

You can see ads from the early 1970s with new-build three bed-semis for £10,000-£12,000.

Short of dereliction no house worth IR£67,500 in 1972 is worth only €650k today.
 
The €86k is more likely to be €8.6k. Four bed semis were selling for approx £12,000 - £15,000 as far as I remember having moved house around then.
 
BigProblem said:
What happens the loan when mother in law passes - can my wife and I continue to pay?
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When your mother dies, the loan must be repaid to Spry.

But don't worry about that.

Your mother gets a loan. You make every effort to repay it, so that by the time she dies, the loan will be quite low and you should be able to refinance it elsewhere.

Brendan
 
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