Mortgage insurance payout help

sagat

Bit of a long, winding problem this one, so please bear with me.


My girlriend has a house bought with her ex-boyfriend. He was paying the mortgage on it, but living elsewhere (with a new partner). He did not pay her any childsupport officially, just £20 or so a week towards the care of their 2 young children (aged 2 and 4).

He died in an accident last year and she received a payout for the mortgage on their property. It has emerged that he had his own business providing IT services and was making about 3k a week. It has also emerged he owes about 50k in personal debt and on top of o that outstanding tax payments too. Her solicitor has take months and months to untangle all his accounts. She is a stay at home mum so has no income, apart from the odd bit of cash I can spare to help.

The mortgage people were ok to freeze the mortgage payments until the insurance paid out, but continued to charge interest. 1) is that standard bahaviour? The payout ended up being less than the amount of the mortgage owed
She then paid a chunk to the mortgage people of about 130k leaving about 120k remaining. This money has been put into a trust for the children. However, due to the fact he owes money, this debt is being taken from the mortgage payout money. 2) Should it not firstly go against his mortgage payments or how does it work? My girlfriend is understandably upset and terrified of losing her home. We are obviously no eperts on the subject, so just trying to do some reading around the subject to understand what her options are.

dunstonh

The mortgage people were ok to freeze the mortgage payments until the insurance paid out, but continued to charge interest. 1) is that standard bahaviour?

That is the correct action. Indeed, they don't actually have to agree to stop payments.

2) Should it not firstly go against his mortgage payments or how does it work?

Depends on if there was a will or not.