November 6th, 2019. Luke Egan
Deal of the Month November 2019: Tackling Probate And A Property Purchase
Losing a loved one can be life-changing, but then having to purchase a property you thought you were going to inherit simply adds to the stress further. Sadly, that was the case for a client we recently worked with.
Here we share their story to hopefully help others who may find themselves in similar circumstances.
About the Deal
Originally, our client approached us seeking a bridging loan to pay off an inheritance tax (IHT) liability and some estate debt on a property he thought he had inherited. However, as the deal progressed, it turned out the client had, in fact, not inherited the property, but was instead named as the beneficiary of the property in a trust.
This meant, for example, if the property was to be let out, our client would receive the income or, if the property was to be sold, the money would be invested by the executors and any profits made would be claimed by the client.
This did not suit the client and decided to purchase the property from the estate. He saw the potential of completing a refurb to increase the property’s value, but there was an issue of time. The executors of the will wanted to sell the property to pay off the estate debt ASAP! And, they were willing to sell the property at under market value, which could mean the client would lose out.
With all of this information, we knew we had to act fast. In just a few weeks, we arranged a funder who was willing to provide a loan without valuation (gross debt £495,000, 60% LTV), meaning we could complete the deal quickly and the client could secure the property from the estate.
The lender also made a facility available for the client to complete the refurb work after completion and subject to a valuation. This was a truly flexible approach which has meant the client secured the property and has the facility in place to complete renovations and realise the true value of the property.
Are You Going Through Probate and Require a Loan?
Technically, a bridging loan can be used for almost any legal purpose. So, a bridging loan could be used by beneficiaries for a number of purposes such as paying legal fees, clearing inheritance tax, or to help avoid a rush sale at below market value.
For more information on bridging loans and how they could help you, please get in touch with our friendly and experienced team of brokers, and check out our blog post: Can a Bridging Loan be Used for Probate Issues?
Article By Luke Egan
November 6th, 2019
Luke heads up our specialist property finance team where his focus is to drive our transactions valued between £100k and £5m.
Luke and his team manage enquiries from initial enquiry through to redemption. Luke also sits on the internal credit committee with Ben and Tom.
Luke joined Pure back in 2014 following a successful role in the Barclays property finance team that lasted over 8 years.See more articles by Luke