Mortgages on Inherited Property: What You Can Do Before and After Probate
If you have inherited a property, you might be wondering whether you can get a mortgage on it, and if so, what the best route looks like.
You may want to live in the home, buy out a relative, fund renovations, switch to a buy to let, or simply tidy up the finance while probate is finalised.
The good news is that you can often secure a mortgage on an inherited property once the legal process gives you the right to do so.
How mortgages work when you inherit
When you inherit a home, you inherit a set of decisions. Your choices usually fall into one of four broad categories.
- Remortgage into your name and live in the property
- Remortgage into your name and keep it as a buy to let
- Raise money against the property to buy out other beneficiaries or to fund works
- Sell the property and clear any existing borrowing
Lenders will look for clarity on ownership, the legal stage the estate has reached, affordability, and the property’s condition.
Your application will be assessed in much the same way as any other mortgage, but with additional checks on title, probate, and any estate liabilities.
The lender will usually rely on the solicitors to ensure that all has been set up correctly in this department.
Can you remortgage during probate
In most cases, a full remortgage into your own name can only complete once probate is granted.
This confirms legal authority to transfer the title to you. That does not mean you must wait to start planning.
Early preparation makes a big difference. You can gather documents, obtain credit reports, choose a lender, and line up the valuation in readiness.
Where funds are needed sooner, short term finance such as bridging can sometimes provide a stopgap while the legal process concludes.
Find out Your Options
Buying out siblings and other beneficiaries
It is common to inherit alongside siblings or other relatives. If you wish to keep the home and they prefer to receive their share in cash, a remortgage or a mix of mortgage and savings can fund the buyout. The process usually involves:
- Agreeing fair value and each party’s share with the help of a solicitor and, if needed, an independent valuation
- Securing a mortgage based on your income, credit profile, and the property value
- Transferring title into your name and paying the agreed settlement to the others
Where relationships are strained or timescales are tight, short term bridging may be a solution to provide funds more quickly, but this will likely not be suitable for most situations.
Letting out an inherited property
You may wish to keep the property as an investment. In that case, you would usually move the finance onto a buy to let mortgage.
Lenders will assess the expected rent as well as your personal circumstances. A typical lender wants to see that the forecast rent covers a set percentage of the mortgage payment at a test rate, and many ask for a minimum personal income. Criteria vary and we will match your case to lenders that fit your profile.
If the property is already tenanted, rent will usually be paid to the estate until probate is granted. Once the title transfers to you, a buy to let mortgage can be used to refinance, release funds, or both. We can liaise with the managing agent or tenants to collect the documents valuers need, which helps the case run smoothly.
Not all lenders offer this type of transaction, needing a cash deposit instead, so best to take professional advice to ensure you are considering the right lenders.
Renovating an inherited home
Many inherited homes need modernisation before they are comfortable to live in or attractive to buyers. If the property is mortgageable in its current state, a standard remortgage can raise funds for improvements.
If it is not yet readily habitable, or if major works are planned, a short term solution may be sensible so you can refurbish first and remortgage later. Options may include:
- Bridging finance to fund works with a clear plan to refinance or sell on completion
- A secured loan if the property meets lending standards but you prefer to keep an existing mortgage in place
- A remortgage on your main residence to release funds where that offers lower cost
Equity release and lifetime mortgage scenarios
You might inherit a property that has an outstanding lifetime mortgage or equity release plan. That borrowing is typically repaid when the borrower dies, often from the sale of the home.
If you want to keep the property, you can repay the balance from the estate, from personal funds, or by arranging a new mortgage.
Providers usually allow a window of time for repayment, but it passes quickly once legal steps begin and you need to make sure you remain in contact with the current mortgage provider to keep them updated.
Inheritance tax basics and why timing matters
Whether inheritance tax is due depends on the value of the estate and the allowances that apply, including the nil rate band and any residence related allowance that can increase the threshold where property passes to direct descendants.
If there is a bill to pay and cash in the estate is limited, finance may be needed to meet deadlines, you can also obtain insurance for inheritance tax.
Bridging or a probate loan can cover tax and estate expenses while a sale or remortgage is arranged.
Using Probate Finance to Cover Estate Costs
In some estates, there isn’t enough accessible cash to cover immediate expenses such as inheritance tax, legal fees, property maintenance, or outstanding debts. When this happens, probate finance can help bridge the gap until a property is sold or a remortgage is completed. Short-term funds can be arranged against the value of the estate, allowing executors to meet deadlines, including HMRC payment dates, without needing to sell assets quickly or use personal savings.
Probate finance is often used alongside the mortgage routes outlined above, particularly where inheritance tax must be settled before title can transfer or before a remortgage can complete. If you’d like to understand how this works in practice, read how probate finance helps cover estate costs, which explains the options available and when they may be appropriate.
Conclusion
It is possible to get a mortgage on an inherited property, but the smoothest outcomes usually come from early planning, clear documents, and lender choice that reflects your aims.
Whether you want to live in the home, keep it as a buy to let, buy out relatives, or fund renovations, there is often a workable route once probate allows the transfer of title, if the remainder of the application meets lender criteria.
If you would like bespoke, independent mortgage advice, contact Kerr and Watson today.
