mortgage granted for terminally ill

Michael7_2

Hi, hope i have posted this in the right place...
3 months ago my father went to his bank and ask for a mortgage on his house...a loan of 28000 against it.....he was granted this without having any way of paying it back and having a terminal illness, he was on pension credit and had no other income or savings, on 6th jan he passed away as a result of his illness, there was no will so i have applied for probate, i cannot understand why the bank gave him this loan without assessing him financially or phisically or making sure he had insurance (which he didnt) just the building insurance. Im puzzled

Michael

Thrugelmir

For what purpose did your late father use the money for?

Michael7_2

The bookies, sounds terrible but its fact, he gambled half of it away on a roullette machine in a Betfred bookies

newmee

shame, OP. Guess he wanted one last hoorah eh. Hope it doesn't take you too long to sort.

opinions4u

I think the state pension and pension credit come to £137 a week.

£7,124 a year x 4 = £28k.

Sounds like he borrowed the maximum they'd let him.

His house, his money, his choice.

Michael7_2

I didnt think he would be granted a remortgage being on benefits??

opinions4u

Michael7 wrote: »

I didnt think he would be granted a remortgage being on benefits??

Different lenders will assess different benefits in different ways.

i cannot understand why the bank gave him this loan without assessing him financially or phisically

It seems to me that they've assessed his ability to afford the monthly payments. I've never heard of a medical being required for a mortgage. You also need to remember that the property is security for the loan so, as you are now discovering, they get their money back with interest when the house is sold.

Michael7_2

I went to CAB and the main point of concern was how my father was to pay the money back, later that day i saw a bank manager and he could not beleive it that he was granted this loan without having any savings or a job for 10 years...he told me to take it further

opinions4u

Michael7 wrote: »

I went to CAB and the main point of concern was how my father was to pay the money back, later that day i saw a bank manager and he could not beleive it that he was granted this loan without having any savings or a job for 10 years...he told me to take it further

To achieve what?

1) What incomes did he actually have? State pension? Pension credits? Private pension? Sickness payments? How much for each one?

2) What was the rate, term and monthly payment of the mortgage?

3) Who is the lender?

he was granted this without having any way of paying it back

Do the answers to (1) and (2) confirm he couldn't afford the payments?

InMyDreams

I am very sorry for your loss.

It seems though that unless you are suggesting that your father was not sound of mind, he made a choice about how he wanted to spend his money. As galling as it must be for you, I think you are going to have to be happy for him that he was able to do what he wanted.

Is there any problem with paying back the debt from the sale of the house? Will there be enough to cover it? Are you worried that you may be liable for any debt not covered by the estate because I don't think that's how it works. I'm sure others with more knowledge will be able to reassure you.

Oldernotwiser

You haven't needed to have life assurance for mortgages for many years and if this was an interest only loan the means of repayment was for the house to be sold after he died, which can now take effect.

I can't really see your problem with this unless you feel that you should have inherited all the money from the house!