Where bridging helps
Probate takes time. The executors need to apply for a grant of probate, value the estate, deal with any inheritance tax and then sell or transfer assets. During that period, the property may be empty, may need work to sell well, or may be wanted by one beneficiary who needs to pay the others their share.
Bridging can fund a buy-out of other beneficiaries, a refurbishment to improve the sale price, or a beneficiary's purchase of a new home before their inheritance arrives. Buyers of probate property also use bridging when the estate wants a quick, certain completion, sometimes at a price below full market value.
Who can borrow and when
Lenders need the borrower to be able to give valid security. Before the grant of probate, the executors' authority to deal with the property is limited, and many lenders will not lend until the grant has been issued and the property can be charged. Some lenders on our panel will consider lending where the client does not yet own the property, or accept a confirmed inheritance as the exit, but these cases need careful legal structuring.
Where the loan is to the executors on behalf of the estate, all executors usually need to agree and sign. Where the loan is to a beneficiary, the lender will want evidence of their entitlement and the timetable for the estate. Your solicitor's input is essential.
Inheritance tax and the estate
Inheritance tax is often due before the estate's assets can be sold, and HMRC charges interest on tax paid late. Some estates can pay tax from the deceased's bank accounts, or pay tax on property in instalments, so take advice from the estate's solicitor or accountant before borrowing. Where borrowing is still needed, lenders will look closely at when and how it will be repaid.
Exit and timing
The usual exit is the sale of the inherited property or the beneficiary's share of the estate. Lenders will want a realistic timetable, taking account of probate, any disputes between beneficiaries, and marketing time. A bridge term with headroom reduces the risk of needing an extension.
We compare lenders that consider probate and inheritance cases, then approach those that fit with a clear case and the solicitor's input. Instant Quotes gives indicative figures as a starting point, and final terms depend on each lender's valuation, legal checks and the estate's position.
If a beneficiary will live in the property
If the borrower is an individual or the trustees of a trust, and the property is, or will be, lived in by the borrower or a close family member, the loan is a regulated mortgage contract with additional protections. That often applies when a beneficiary keeps the family home. We will tell you at the outset if that applies and how your case will be handled.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
