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  • FIRST POST
    • cclem345
    • By cclem345 9th Jul 17, 3:28 PM
    • 52Posts
    • 16Thanks
    cclem345
    Inheriting a house with a mortgage.
    • #1
    • 9th Jul 17, 3:28 PM
    Inheriting a house with a mortgage. 9th Jul 17 at 3:28 PM
    Hello folks.

    My mother recently passed away and left a house with a mortgage.

    The house value is £110,000 and theres £45,000 left.

    As i live and work in Spain I am no longer classified as a UK resident therefore I cannot take over the mortgage.

    I am the sole beneficiary. My aunt and uncle are the executors.

    The solicitor has said that the house cannot directly to into my name as I can't get approved to take over the mortgage. The only options are to sell the house or leave it short term under the control of the executors.

    Has anyone else left their inheritance under the control of the executors for any length of time? Has this proved difficult.

    I have the money to cover the mortgage but the bank won t give me a mortgage.

    I would ideally like to keep the house however I don't want it sitting in the control of my aunt and uncle for years to come and always having to ask them for permission when I want to sell or rent it.

    Thanks
Page 1
    • gettingtheresometime
    • By gettingtheresometime 9th Jul 17, 3:29 PM
    • 2,752 Posts
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    gettingtheresometime
    • #2
    • 9th Jul 17, 3:29 PM
    • #2
    • 9th Jul 17, 3:29 PM
    Sorry for your loss.

    Is there an insurance policy linked to the mortgage, or other cash assets that could be used?

    I always understood that if there wasn't a way of paying off the mortgage on the death of the mortgagee then there was no option but to sell it
    Lloyds OD / Natwest OD / PO CC / Wescott cleared thanks to the 1 debt v 100 day challenge


    Next on the list - the Argos Card!
    • cclem345
    • By cclem345 9th Jul 17, 3:30 PM
    • 52 Posts
    • 16 Thanks
    cclem345
    • #3
    • 9th Jul 17, 3:30 PM
    • #3
    • 9th Jul 17, 3:30 PM
    Have the money to cover the mortgage payments*
    • cclem345
    • By cclem345 9th Jul 17, 3:33 PM
    • 52 Posts
    • 16 Thanks
    cclem345
    • #4
    • 9th Jul 17, 3:33 PM
    • #4
    • 9th Jul 17, 3:33 PM
    No insurance in place and the other assets can only reduce the mortgage by 5-6k.

    I wanted to keep the house and rent it however nationwide aren't helping and my circumstances are pretty difficult as I live abroad, am self employed etc. The idea seems to leave it under the control of the executors for 1 year rent it on the quiet and then review it.

    But I don't know what my rights are if it sits under the control of the executors. Surely it means legally I'm not allowed to do anything with the house without their say so.
    • gettingtheresometime
    • By gettingtheresometime 9th Jul 17, 3:41 PM
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    gettingtheresometime
    • #5
    • 9th Jul 17, 3:41 PM
    • #5
    • 9th Jul 17, 3:41 PM
    A quick search shows that a Barclays (note : I'm not qualified to recommend them!) do an ex-pat mortgage so there must be organisations that would cover your situation.

    If you want to rent it out you'll probably need an ex-pat btl mortgage)
    Just because nationwide won't help just means you have to look elsewhere
    Lloyds OD / Natwest OD / PO CC / Wescott cleared thanks to the 1 debt v 100 day challenge


    Next on the list - the Argos Card!
    • cclem345
    • By cclem345 9th Jul 17, 3:56 PM
    • 52 Posts
    • 16 Thanks
    cclem345
    • #6
    • 9th Jul 17, 3:56 PM
    • #6
    • 9th Jul 17, 3:56 PM
    I have tried all avenues. Barclays and HSBC do them. However my situation is complex as I only moved to Spain last summer, my mother passed February.

    My business is self employed so 1) I dont declare all my earnings and 2) my earnings are very small as it's first year maybe talking €28000 a year however that is divided by me and my partner as we work together. So I would be going with a salary of €14000 Euro and proof off about €10000 a year.

    Not exactly much.
    I have next to no bills so basically I save around 500 a month which is more than the mortgage payments.

    For me I would sell the house however the executors are pushing me to find a way to keep it and rent it out. They aren't coming up with any solutions but merely saying, keep paying the mortgage which I'm already doing, they being executors will rent it out, get some income from it and wait until the bank write saying that the deeds of house need sorted etc which could take 12-18 months as the bank will be getting their money and nothing will flag up for a while.

    It's a head melt to be honest id I'd rather just sell it however I understand my aunt and uncle want to try to keep it and help however they can.
    • hjd
    • By hjd 9th Jul 17, 4:06 PM
    • 1,059 Posts
    • 7,867 Thanks
    hjd
    • #7
    • 9th Jul 17, 4:06 PM
    • #7
    • 9th Jul 17, 4:06 PM
    My business is self employed so 1) I dont declare all my earnings
    Originally posted by cclem345
    Do you really mean that? Especially on a public forum - and you want to get a mortgage?
    • Sambella
    • By Sambella 9th Jul 17, 4:07 PM
    • 329 Posts
    • 307 Thanks
    Sambella
    • #8
    • 9th Jul 17, 4:07 PM
    • #8
    • 9th Jul 17, 4:07 PM
    Well it is yours so really it is up to you what to do with it not them.

    If they want it they can buy if off you.
    • gettingtheresometime
    • By gettingtheresometime 9th Jul 17, 4:13 PM
    • 2,752 Posts
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    gettingtheresometime
    • #9
    • 9th Jul 17, 4:13 PM
    • #9
    • 9th Jul 17, 4:13 PM
    I have tried all avenues. Barclays and HSBC do them. However my situation is complex as I only moved to Spain last summer, my mother passed February.

    My business is self employed so 1) I dont declare all my earnings and 2) my earnings are very small as it's first year maybe talking €28000 a year however that is divided by me and my partner as we work together. So I would be going with a salary of €14000 Euro and proof off about €10000 a year.

    Not exactly much.
    I have next to no bills so basically I save around 500 a month which is more than the mortgage payments.

    For me I would sell the house however the executors are pushing me to find a way to keep it and rent it out. They aren't coming up with any solutions but merely saying, keep paying the mortgage which I'm already doing, they being executors will rent it out, get some income from it and wait until the bank write saying that the deeds of house need sorted etc which could take 12-18 months as the bank will be getting their money and nothing will flag up for a while.

    It's a head melt to be honest id I'd rather just sell it however I understand my aunt and uncle want to try to keep it and help however they can.
    Originally posted by cclem345
    So do you want to sell it or not?

    Tbh it sounds like a complete recipe for disaster - if there's no way you can get a mortgage in your own name then you're probably better off selling.
    Lloyds OD / Natwest OD / PO CC / Wescott cleared thanks to the 1 debt v 100 day challenge


    Next on the list - the Argos Card!
    • Thrugelmir
    • By Thrugelmir 9th Jul 17, 4:27 PM
    • 55,173 Posts
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    Thrugelmir
    For me I would sell the house however the executors are pushing me to find a way to keep it and rent it out.
    Originally posted by cclem345
    Why?

    You are beneficiary of the estate. Tell them you don't wish to.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • AdrianC
    • By AdrianC 9th Jul 17, 4:34 PM
    • 15,074 Posts
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    AdrianC
    Let's go back a step or three.

    You are, I presume, the sole beneficiary of your mother's entire estate, whether under intestacy rules or via a will doesn't make a difference, other than the will presumably named the executors.

    Her estate includes a house worth £110k.
    Does it include any other assets? I presume not much, from the rest of your post.
    However, it includes a £45k liability - money borrowed against that house.

    So you are in line to inherit (£110k-£45k)=£65k, plus any other assets, once probate is granted and the executors can distribute the estate.

    Except your mother's estate cannot raise the £45k to repay that liability. So the obvious way for the executors to get probate is to sell the house. If, otoh, you specifically want to inherit the house, you can pay in the £45k to her estate, which the executors can use to clear the mortgage. How you raise that £45k is not the executors' problem.

    Can they, as executors, choose to start renting the property, to buy you time to raise the money? Perhaps - but I would think not. They are under a duty to get probate granted in a timely manner - much less than the timescales involved in property rental.

    That presupposes that you, once you inherit the property, want to rent it. What happens once probate is granted and the estate is distributed is none of the executors' business - if they are pushing you to do anything in particular, that is outside of their role as executors. Sure, it may have been their sister's home, and they'd rather it "stayed in the family". Tough. It is not their property nor will it ever be their property - it is still the property of their sister (deceased), and once they complete their job as executors, it will be your property - and they need to understand that. If you do not want to rent it, then the executors are clearly not acting in either the estate's best interests or yours by pushing to let it before probate.

    If they want to keep it in the family, then they can find £65,000 for you and £45,000 for the lender, and buy it from the estate themselves. If they can't do that, then they have no other option but to follow your wishes and sell it.

    If they refuse to accept this, then you need to look into replacing them as executors. It may be worth the cost to get the solicitor to act, if you can't do so yourself.
    • cclem345
    • By cclem345 9th Jul 17, 4:41 PM
    • 52 Posts
    • 16 Thanks
    cclem345
    It's a tricky one.

    If it was possible to rent it I would keep the house however it is proving impossible.

    When I pushed the solicitor as to how once probate was granted the house wasn't changed into my name she said, it would sit titled "under the control of the executors".....not under my name. Simply because I can't take over the deeds cause I can't get the mortgage.

    The most logical thing seems to sell. I can't get the 45k to pay and I don't really want it sitting under the control of someone else.

    Has anyone any experience where the house they inherited wasn't transferred into their name but stayed in control of executors. It seems rather strange and I didn't even know such a thing could happen yet that's what seems to be going ahead.

    Thanks
    • frugalmacdugal
    • By frugalmacdugal 9th Jul 17, 4:53 PM
    • 6,083 Posts
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    frugalmacdugal
    Hi,

    I'm confused by the fact that there was nothing set up to repay the mortgage if your mother had survived to the end of the mortgage term.
    Y'all take care now.
    • Thrugelmir
    • By Thrugelmir 9th Jul 17, 4:55 PM
    • 55,173 Posts
    • 48,370 Thanks
    Thrugelmir
    The role and duty of executors is very clearly defined.


    What Are An Executor’s Duties?

    The executors are responsible for distributing the estate of the person who has died in accordance with the terms of the deceased’s Will. An executor owes a duty to all of the beneficiaries of the estate to administer the estate with due diligence and in accordance with the terms of the Will. This includes:

    i) putting the interests of the beneficiaries before those of the executors;
    ii) acting reasonably and prudently in relation to the estate property;
    iii) taking all proper steps to protect the assets of the deceased;
    iv) selling the assets of the estate; and
    v) distributing the proceeds of the estate to the beneficiaries.
    You should remind them of this.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • camptownraces
    • By camptownraces 9th Jul 17, 4:55 PM
    • 310 Posts
    • 187 Thanks
    camptownraces
    I really don't think the executors have any choice but to discharge the deceased's intentions: that her whole estate goes to her son.

    The house can't go straight from the estate to the son *unless* the mortgage is paid off. Presumably from the date of death in February the house must have been racking up mortgage interest and repayments for which mother's estate is liable, thereby diminishing any other assets.

    If the executors consulted a solicitor and outlined the situation, solicitor's advice would be to put the house on the market for a quick sale before it's repossessed.
    • AdrianC
    • By AdrianC 9th Jul 17, 4:59 PM
    • 15,074 Posts
    • 13,390 Thanks
    AdrianC
    I'm confused by the fact that there was nothing set up to repay the mortgage if your mother had survived to the end of the mortgage term.
    Originally posted by frugalmacdugal
    I'm not.

    Even assuming it's not a simple repayment mortgage, where the lifetime of the mortgage repayments provide the exit route, as it most likely is, there are many interest-only mortgages out there without adequate (or, indeed, any) repayment vehicles in place.
    • G_M
    • By G_M 9th Jul 17, 5:05 PM
    • 41,077 Posts
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    G_M
    This really is not difficult - though it may not please you

    * the will did not set up a Trust in your name, so the assets cannot be held ad infinitum or until such time as it pleases you
    * the Executers must administer the Estate until such tme as Probate is granted, all liabilites are paid, and te Estate is distributed. They cannot just hold onto assets.
    * the current mortgage is in the deceased's name. It cannot remain thus. Either the mortgage must be transferred to another name, or paid down. This is a duty of the Executers
    * In deciding what to do, the Executers must tae your wishs into account, within the parameters of their duties

    It seems
    * you cannot afford to pay off the mortgage
    * you cannot get a new mortgage in your own name, nor get the current mortgage transferred into your name
    * the Estate cannot pay off the mortgage without selling the property

    The Executers have no option then but to sell the property, pay off the mortgage and distribute the remains of the Estate (to you).
    • cclem345
    • By cclem345 9th Jul 17, 5:11 PM
    • 52 Posts
    • 16 Thanks
    cclem345
    My mother had 11 years left of the mortgage. She unfortunately passed away completely out of the blue (I know can happen anyone, anytime).

    She had life insurance but about 1 year previous either consciously or not decided not to renew it. It may have slipped her mind or maybe she never got around to it but for the previous 10-11 years on the mortgage she has cover.

    My aunt asked me what I would like to do with the house. I did initially state of there was a way I could keep it I would. I have been making the mortgage payments up to now so there has been no bills missed hence why nationwide aren't chasing or pushing for decision.

    I left it in the power of my aunt to come up with a plan. I know they have a few quid so I was thinking of some form of loan where they would own part of the house until I bought them out. However this didn't come up in conversation.

    I have said to them look if it's going to be difficult I'd rather sell. However I think they want to try and help and with it being a delicate situation I dont want to forcefully say sell the house.

    My concern is how can my mother's estate be left "under the control of the executors" after probate. They seem to think as well as the solicitor that short term 6-12 months that as long as I'm paying nationwide and the mortgage is being met that nationwide wont push for deeds and a new official owner of the property.

    I know this can't go on forever but if I was certain to sell the house at some stage maybe it's best to rent it out short term and then put it on the market.

    I'm 25 so I really have never come across this before and hence why I'm letting the executors advise me the best they can.
    • AdrianC
    • By AdrianC 9th Jul 17, 5:21 PM
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    AdrianC
    I have said to them look if it's going to be difficult I'd rather sell.
    Originally posted by cclem345
    OK - it IS going to be difficult, since you can't easily raise the £45k.

    However I think they want to try and help and with it being a delicate situation I dont want to forcefully say sell the house.
    Let's look at it slightly differently...

    Don't think of it as "inheriting the house" - because your mother didn't "own" all of it... You are inheriting just under 60% of it. You can either raise the money to buy the other 40%, or sell the 60% you have.

    I know this can't go on forever but if I was certain to sell the house at some stage maybe it's best to rent it out short term and then put it on the market.
    Honestly? That's the worst of both worlds - you have all the short-term hassle and expense (borrowing the money, getting the house ready to let, finding trustable agents, risking poor tenants, off-shore taxation), without the one thing that may make letting worthwhile - long term capital growth. All you're doing is putting off the inevitable. Either make the decision to let it long-term, or make the decision to sell it now.

    Maybe this will help...
    Do you actually WANT to be an international landlord? If so, is that the best possible property to let? If you inherited £65k cash, would you think that raising the other £45k and buying THAT property was your optimum investment? Even if, hand on heart, you can say yes to that, it ignores the hassle that usually arises from letting a property you have an emotional investment to - "how dare the tenants treat my mother's house like that?"
    • gettingtheresometime
    • By gettingtheresometime 9th Jul 17, 5:27 PM
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    gettingtheresometime
    Things are obviously made complicated by the fact you live in Spain so can't get UK based legal advice of your own.

    Is the solicitor a joint executor?

    TBH I can't help feeling there's a hidden agenda in the Aunt & Uncle coming up with this cunning plan.
    Lloyds OD / Natwest OD / PO CC / Wescott cleared thanks to the 1 debt v 100 day challenge


    Next on the list - the Argos Card!
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