Mortgage holder has passed away - house left to a minor

anoushka3005

Hi there, my aunt recently passed away leaving her house, which has a mortgage on it, to her 12 year old son. He won't continue to live in it, and is adamant that we don't sell it. If it was rented then that would more than cover the mortgage, leaving the property for him to live in or sell when he is 18.

We have been told by the Abbey that as he is a minor he can't be the mortgage holder, which is fine. But they have also said that it isn't possible for the mortgage to be held by the estate in trust until he is of age. All his close family already have mortgages so we don't think any of us can get a buy to let, does anyone have any other solutions?

Many thanks, Anoushka

oliviasmummy

is the mortgage balance not paid by any life insurance policies i thought you had to have something in place to cover the cost of a mortgage when you take one out in the event of your death.

just asking cos that way the house wouldnt have the mortgage so you would be able to rent out regardless.

Trying_to_be_good

A mortgage wouldn't be salary dependant if it was a buy-to-let mortgage, so it wouldn't necessarily matter that family members have their own residential mortgages.

Ultimately I think as Abbey are due their money, they could probably force a sale, with or without the 12-year-old's consent (assuming no other assets to cover the mortgage value).

anoushka3005

Thanks for the replies - there is a death in service payout that can pay off some of the mortgage but there will still be about £70K owing. I guess one of the family will have to get a buy to let mortgage but not sure how that works legally speaking as none of us own the house. Ah well, another chat needed with the Abbey, I think! Cheers!

opinions4u

anoushka3005 wrote: »

Hi there, my aunt recently passed away leaving her house, which has a mortgage on it, to her 12 year old son. He won't continue to live in it, and is adamant that we don't sell it.

It's up to the executors as to the suitability of retaining the property or selling it. I really don't think a 12 year old should be left making an investment decision like this.

He may be adamant at the moment, but if you explain the potential losses that operating a buy-to-let operation can bring, that may change his mind.

Rents are falling and house prices look unlikely to recover for several years. Another option is to sell up, repay the mortgage and find a safe home in trust for the capital until he is 18.

At that point in time he can make an adult decision as to how best to use the money.

anoushka3005

No, the 12 year old doesn't get final say, my father is the executor and ultimately he'll decide what's financially viable, but obviously if we can keep the house for until my cousin is 18 we will. But I don't know if the executor of the estate can get a buy to let mortgage as they doesn't own the house?