Value of property does not cover outstanding mortgage on death.

hyndlegs

My father in law has recently died and after getting his property valued its come to light that the value does not cover the current mortage owing. Is it as simple as informing the bank of this and arranging for the bank to take control of the property ? I am hoping we dont need solicitors etc. Many Thanks

jacques_chirac

Does he have any other assets?

Dunroamin

Does he have any life assurance?

hyndlegs

No life assurance and assets of cash under £1000 in the bank that dont cover the funeral costs.

Gary123456790

You'll be glad to know you cant inherit debt!

antrobus

hyndlegs wrote: »

My father in law has recently died and after getting his property valued its come to light that the value does not cover the current mortage owing. Is it as simple as informing the bank of this and arranging for the bank to take control of the property ? I am hoping we dont need solicitors etc. Many Thanks

In the absence of any other assets to cover the shortfall, basically, yes.

Goldiegirl

If you wanted to keep the property, I suppose you could apply for the mortgage and property to be transferred to you, but I would think it'd be a condition of the transfer that the debt was reduced.

Otherwise, I think the only option is for the executor to give voluntary possession of property to the lender.

holly_hobby

The executor or administrator (in the case of no will), has the legal duty to adminster the estate, which includes the discharge of all debts from available funds, with any residue going to beneficiaries.

If having obtained comparibles, it appears that the achieveable market price will not be sufficient to discharge the mge, the executor has a duty to inform the lender (creditor), and mediate the situation.

But, as stated above, your FILs debt is non-transferrable, so when the pots empty, the remaining creditors will essentially have to write the debt off.

CAB will advise further if any creditors start playing silly beggars, in claiming anything different (ie the deceaseds family are responsible etc).

Hope this helps, with my sympathy for your loss xxx

H xx

hyndlegs

Thanks to all for the information, we will get a letter off to the mortage people informaing them of the situation. Thanks again