Equity Release Situation - advice needed plse

holly_hobby

OP will be the owner of the residual estate, once all liabilities have been settled (should there be anything remaining !).

The mortgagee (if a traditional equity release and not HR scheme), will not care from where the funds originate, that are used to actually redeem the mortgage (ie - OP could remortgage her own property to release funds to settle the OS ER mge, effectively purchasing the property from the estate, subject to LTV, status etc).

But unless that is an option, it appears the estate will have to dispose of the property (by sale to Mum or other party) in order to settle the os mge charge and indeed other liabilities.

If the mortgagee is put in the picture, about how the estate are looking to manage the situation, there is no reason why they should not give them a reasonable amount of time and breathing space to secure a sale or arrange replacement finance, the rub is in a sale situation, what they consider "reasonable" compared to market conditions, and achieving a fair price.

DOV = Deed of Variation (an application to change a will after death).

However, with a mortgage charge on the property, and Mum not party to the mortgage, the estate would still need to settle the os liability held solely in the deceaseds name (and also apparently for his sole benefit - Mum only moving in a short time before death occured).

Sticky situation at a very difficult time for all ... I wish the OP & Mum well .. x

Hope this helps

Holly

getmore4less

winnie12 wrote: »

Thanks all for your help.

Getmore4less - my Mum's lost her house, which was the main reason she returned. It was literally a matter of weeks before he died. Financially he had been helping her out in small ways, but nothing official. I'm maybe being dim, but what's an 'OP' and 'DOV'?

The house if worth approx £130k. Equity debt £36k and other (non secured) debts £30k.

Soto keep the house you need to raise £63k to clear the debts any other assets?

Does mum have debts?

magpiecottage

The norm with a "lifetime mortgage" of this nature is that no interest is actually paid but it is simply added to the loan and rolled up (i.e. interest is charged on the unpaid interest).

On death the home is sold and the mortgage repaid ("mortgage" literally means "death charge"). The lender can force this, if necessary seeking to evict anybody living in the property. Anybody who moved in after the mortgage was taken out will not normally have any protection from this.

As executor, your primary responsibility is to settle the affairs of the deceased. That means you must use their assets (rather than your own) to pay off the secured creditor (the mortgage lender), pay for funeral and other costs, settle all unsecured debts if there are sufficient assets available (which the equity in the house would be) and then distribute whatever is left to the beneficiaries of the will.

If you sold the house to yourself for less than the market value then anybody on that list could, theoretically, sue you personally. However, if you bought it from the estate for just enough to clear then debts and paid them off then none of the creditors would have a case against you since they would have suffered no loss.

The beneficiaries could sue you but since you are the only one that is not going to happen.

So you can keep the property but only if you can raise sufficient funds to clear all the debts - not just the mortgage.

Mum's debts will not need to be cleared, though.