Taking over a mortgage on death of owner?

simpywimpy

Both my parents have now passed away. Their house has a small interest only mortgage with Santander which is on a base rate tracker so as you can imagine, the rate is fantastic at the minute.

Before I call them what are the chances of keeping the same rate and just me taking it over from my parents?

Think its 0.5% at the minute but to remortgage would take it up to normal rates.

Crashandburn

Sorry to hear this, but with regards to the rate, I can see Santander doing the upmost to get you off that rate. Can't see anyway of you keeping it.

holly_hobby

The mge debt will have to be settled from their estate, to which I am assuming Mum & Dad had no life cover and/or repayment vehicle for the interest only mge.

The debt forms part of Mum/Dads estate (whomever was 2nd death), and as such must be discharged (repaid) by the administrators before probate can be completed.

In this case and if you wanted to retain the property, you would effectively be purchasing the property from the estate (technically a transfer of equity - which is all a sale is) - of course you may apply to Santander to effect such a tsf, but you will be assessed as a new mge applicant, and as such even if accepted, it is doubtcful you would retain the current product Mum & Dad hold, as you were not party to the contractual agreement relating to this arrangement.

Given this, you may of course choose to source a mge from an alternative provider to pch the property from the estate and thereby redeem the os Santander mge, that as I say, will need to be addressed as part of probate and administation of the estate.

Your Probate practitioner/Executor or Administrator is responsible for settlement of debts and discharge of estate, so have a word with them, and also the lender to enquire regarding the TOE being considered.

Hope this helps

Holly

kingstreet

Usually the estate of the deceased is expected to settle any debts of the estate before the estate proceeds can be distributed.

This would mean the beneficiary using cash, or raising a mortgage of their own, to repay the current one.

I have no idea if a lender would accept a theoretical "transfer of equity" from the estate to a beneficiary and how the rate might be affected. You'll need to ask them.

Thrugelmir

An almost certain no in answer to your question.

The matter is little more complex than merely taking the mortgage over.

simpywimpy

I was doubtful that they would keep such a great rate. My solicitor advised to just keep paying the mortgage myself and as long as they are getting paid they will be happy but this doesnt seem right

Mojisola

simpywimpy wrote: »

My solicitor advised to just keep paying the mortgage myself and as long as they are getting paid they will be happy but this doesnt seem right

If your solicitor really said that - get a new solicitor!

simpywimpy

Ive used him for years and is handling the probate for me.

Ive since refurbished the house to bring it up to date and want to rent it out so I guess I could apply for a BTL mortgage on it. I wonder how long they would give me to sort it out?

holly_hobby

simpywimpy wrote: »

I was doubtful that they would keep such a great rate. My solicitor advised to just keep paying the mortgage myself and as long as they are getting paid they will be happy but this doesnt seem right

Quite aside with what happens if their signature is reqd at any point ? And when the end of the mge term arises ?

This is completely wrong and obv he doesn't understand probate at all !!

As explained this is a debt of the decd's estate, and in administration of the estate the executor/administrator has a legal responsibility to advise all relevant persons (meaning all creditors, banking providers, utility svcs, pension provider, DWP if in receipt of benfits or penson, insurance/savings/investment providers, etc.. etc) and to ensure (at least until all estate funds are exhausted), that all os debts of the decd have been discharged (in a timely manner and without wilful delay), for probate to be completed with any residual estate apportioned under the terms of the will or Intestacy Laws (if no valid will located/exists at time of death).

To which, I would suggest you engage a Solicitor whom is familiar with the legal responsibilities of an executor/administrator, and will advise accordingly.

Hope this helps

Holly

Thrugelmir

simpywimpy wrote: »

I was doubtful that they would keep such a great rate. My solicitor advised to just keep paying the mortgage myself and as long as they are getting paid they will be happy but this doesnt seem right

The caveat being "until probate is granted".