It can be used to finance:
- Recovery of inheritance rights and costs;
- Inheritance taxes;
- Any remaining debts;
- The repurchase of balance;
- Exit from joint ownership: by buying back the amount of the undivided share or shares
What is the mortgage?
A mortgage is a type of home loan security. It is a promise made by the owner to a lender who agrees to maintain a right on his property to ensure that the borrower will repay the loan. In other words, the mortgage is a form of security that allows the lender to recover the loaned funds if the borrower does not repay them. If the borrower does not repay the loan, the lender can seize the property and sell it to recover the money owed to him.
If the value of the property is large enough, it is quite possible to obtain additional liquidity with the mortgage cash loan to pay fees and taxes.
Before taking out a mortgage to fund an estate, it’s important to understand the process and check with your bank or mortgage lender for information on terms and interest rates. It is also important to understand the obligations associated with a mortgage and to ensure that you are able to meet them.
What you need to know about inheritance:
inheritance rights
If you have accepted an inheritance you will have to pay duties. Even if your inheritance is very important, it is sometimes difficult to have liquid sums to pay these rights. You will therefore have to use the mortgage cash loan to guarantee your own property. It is not possible to pledge property belonging to the estate until it is closed.
Inheritance costs
Inheritance costs correspond to notary fees, maintenance and conservation costs of real estate, but also to taxes and duties if the succession is difficult … be careful, an inheritance can take several years.
Joint ownership exit
Example of disagreement between heirs: your brother wants to sell and you want to keep the property. You will have to get out of joint ownership by buying back the balance corresponding to your brother’s share. The notary will have to estimate your property and you can apply for a mortgage cash loan to get out of the joint ownership.
There are often requests to obtain an estate advance but no loan is possible until the estate is settled. A succession in the event of conflicts between the heirs can last for years and it is moreover legally impossible.
How to finance an estate with a mortgage?
It is possible to finance an estate with a mortgage. This is a home loan that is secured by inherited assets, and can be used to cover inheritance costs and taxes. Pledging the inherited asset allows the beneficiary of the estate to benefit from a loan at a lower interest rate than traditional bank loans. The beneficiary of the estate must generally provide another personal guarantee to cover the entire loan.
To finance inheritance rights, in particular when these include real estate, it is possible to take out a mortgage by guaranteeing one or more assets of the inherited estate. This guarantee takes the form of a mortgage or a bond issued by the guarantee company.
How to obtain funds while waiting for the estate?
In some cases, the heir receives an asset of a certain value, which he must absolutely sell because he cannot financially afford to keep it.
If you wish to renounce your estate for financial reasons, you will need to find funds to:
- Pay inheritance costs, as the sale can take more than a year (for high-value assets, the sale process can be long);
- Pay bills, taxes and condominium fees;
- Make arrangements to showcase the property during the sale.
In these cases, here is what you can do:
- Apply for a mortgage to get cash
- Mortgage the house or apartment you inherited;
- Borrow up to 50% of the value of the property;
- Choose repayment In Fine: this involves making monthly interest payments on the loan, followed by a lump sum repayment of the principal capital at the end of the maximum duration of 10 years.
Warning: for real estate that is worth a lot of money, it usually takes time to sell it to the right buyer at the right price.
To obtain a mortgage loan for inheritance tax or to finance it with a mortgage, consider contacting a professional broker like Crédigo who will be able to offer you different options and advise you.
