Inheriting a property can be an emotional and stressful experience. It is often an unexpected responsibility left to you with little instruction on what to do next.
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A whopping 36% of people are expected to inherit property at some point or other. Here are some things to watch out for and a few options of what you can do with the house.
Taxes and mortgages
Before you can decide what to do with the house, you need to determine if the mortgage has been fully paid. If not, you can use the life insurance of the deceased to pay the remaining balance. It’s also essential to make yourself aware of inheritance tax and how to approach it. You have six months to pay inheritance tax.
Dealing with probate
If the property is not fully paid off, the deceased will have allocated an executor to take care of the remaining payments, taxes and debts. Probate can take up to a year to complete, and you can’t do anything until it is done. Use this time to grieve your loved one and think about what you would like to do with the property.
If the deceased died without a will or spouse, you would need to apply for a ‘grant of representation’ to access the bank account. This is another form of probate. You can then access their funds to pay for the funeral and arrange assets to be sold or passed on.
Inheriting a house with a mortgage
If you have decided to take on the property’s mortgage, you need to put it into your name. This can be tricky if you already have a mortgage on another property. Speak to a fee-free mortgage broker for some advice or sell the property to pay off the mortgage.
You may need to pass affordability and credit checks to pass the mortgage into your name.
You own the home – now what?
Sometimes inherited properties come with too much emotional baggage, and the best option is to sell them. However, selling can be difficult if you live far away from the inherited place or you’re not ready to clear out the property. Consider keeping a few personal items and then hiring a professional cleaning and clearing service to perform a full house clearance.
Alternatively, some sellers decide to renovate the house. Strip any dated wallpaper and ageing features to make it more appealing for potential buyers. Invite a few estate agents to the property before deciding on a final value.
Renting can be a good halfway point between keeping and selling your inherited house. You can own the property and make money from it if you’re not quite ready to let it go. If you are a first-time landlord, consider using a letting agent to take care of the letting process for you. You can gain another income stream without becoming an accidental landlord.
Your inherited house might be the home for you. If the mortgage has been paid off and you own the property outright, you can move in as soon as you like!