Mortgage charges on Death

bigbirdy

Good Afternoon!



I am hoping you could advise me.



My Mum died recently and left me the house. I could not geta mortgage with Santander but have gone with Halifax now and it’s allgoing through. I spoke to Santander shortly after my Mum passed and I am surethey told me I wouldn’t be charged anything as the account would be dormantuntil the Grant of Probate was issued (this will be here in a week or so).

I have just rang them to let them know about the Grant ofProbate and they told me interest will have been charged monthly on Mumsmortgage account until they see the Grant of Probate.???

I admit I was in a state when I rang them to inform them ofMums death but I am sure they told me I would not be charged interest on themortgage and now they won’t tell me anything about the account until thereceive the Grant of Probate.



Also does anyone know if I will be charged the earlyredemption charge ( Its £2000.00 and the fixed deal ends in December 2013)Surely not if the closure of the account is due to a death?



Any advice would be great – I am living on pennies as it isand don’t know how the interest and early repayment charge can be paid?



Thanks x

Thrugelmir

bigbirdy wrote: »

Also does anyone know if I will be charged the earlyredemption charge ( Its £2000.00 and the fixed deal ends in December 2013)Surely not if the closure of the account is due to a death?

Why not? The beneficiaries of the will are the only ones that gain. Banks aren't charities.

The lender will have withheld payment of the mortgage. Wouldn't have frozen interest though. Interest normally accrues until such time as the debt is discharged.

If interest was frozen. Then there's no incentive to sell or remortgage the property. Resulting in abuse of the system.

bigbirdy

Thanks, was just not sure about the early repayment with Santander as with my research it seems a lot of lenders seem to cancel the early repayment chargeas it's deemed unfair to charge when someone has died.
Believe me I know that banks are not charities, was just asking:)

Thrugelmir

bigbirdy wrote: »

Thanks, was just not sure about the early repayment with Santander as with my research it seems a lot of lenders seem to cancel the early repayment chargeas it's deemed unfair to charge when someone has died.

No harm in asking I should have added.

The reason for redemption of the mortgage is in a way irrelevant. The bank itself has a back to back commitment for the funding of the mortgage. So the ERC merely compensates the bank for its own costs. It's not just a penalty for the sake of one.

holly_hobby

Firstly, I would like to say I am so sorry for your loss ..... and will try to help as much as possible x

With respect to the interest on the mge, yes that will continue until its redeemed (paid off). The executor/administrator should be ensuring that mge payments are continuing OR that the mge lender has agreed to suspend and roll up payment collection (not the actual charging of interest !) unitl probate is complete, and the total mge & any roll up is repaid.

With regards to the ERC - this is essentially to stop peeps rate hoping and to compensate the lender by way of a compsenationary figure for the effective breach of contract (which requesting to exit the mge product early, essentially amounts to).

That being said, although lenders are a business and purely there to generate profit ... they aren't heartless swines either .... and given the circs underpinning this mge redemption (and the fact that the ERC ends this Dec anyway), you may find that they choose not to impose the ERC (which is highly likely), and may just levy the std mortgage exit admin fee without further penalty.

Only 1 way to find out and thats direct from the horse's mouth

Hope this helps at what will already be a very difficult time for you and your family ...

Holly xx

bigbirdy

Thank you so much Holly for your kind words and advice! xx

LydiaJ

Hello bigbirdy

Firstly, I'm sorry for your loss.

I'm afraid I don't know much about mortgages on death, but just in case your mum had any credit cards, I thought I'd add a quick note to say that when I was executor recently, the credit card interest was frozen when the person died.

Good luck getting it all sorted out.

bigadaj

Well one thing that normally determines a contract is death so in that circumstance the erc may not e applicable, as even if you wanted to take over the mortgage you couldn't as a differenet individual from your mother.