Mortgage - Could we lose the house?

greek1

My mother past away coming up 3 years ago and I have just found out from my father that the house and the mortgage were both in her names as he is self-employed and they would not mortgage him.

He hasn't declared my mother as past to the mortage lender as he is under the impression he would lose the house and he is very scared that this will happen. My mother had no insurance so nothing was paid off.

We dont know what help we can get or what situation we are in. If we did declare my mum as past what would happen to us and the house?

Added information: I am 21 years old and working full time and I have a 16 year old brother who is starting his A-levels in a few weeks.

[Deleted User]

I think this is one for a solicitor.

ellesbellesxxx

Hi,
First of all, really sorry to hear about your Mum.
You definitely need to investigate this with a solicitor - it all depends on if your mum had a will too. If she died intestate, then I think her estate (the house) goes to her next of kin... either her husband or you and your brother.
Could you go to Citizens Advice first?
It will all get sorted. x

allydowd

Call the charity Shelter for advice. Tel: 0344 515 1540

Stewart_78

Yes, get some legal advice (free). Unless your mum left her share of the house to anyone else, it would automatically pass to her spouse. As long as the mortgage is being paid and is up to date, I can't see the bank taking any action to re-posses. Is it all up to date?

Shovel_Lad

You might be better asking this on the Deaths, Funerals and Probate board here:
http://forums.moneysavingexpert.com/forumdisplay.php?f=217

[Deleted User]

Was there no life insurance policy, to pay off the mortgage?

Gold_bullion

My condolences for the loss of your Mum.

I believe this can depend in part how the mortgage deed is written - with some (particularly older) mortgages there is a right to take over the loan by the person(s) who inherit(s) the property but more modern products may insist the loan is repaid on sale or transfer to a different name. I suspect it will also depend on the particular lender and their policy in such circumstances.

It's also going to depend on whether your Mum left a will and how much the property is worth. If she died intestate then the first £250k of her estate would have gone to your Dad if they were married plus a life interest in half the rest. Bear in mind the "estate" includes the mortgage debt as a minus sum.

I don't believe there is a legal requirement to transfer a property in a deceased person's name to someone living, so I would definitely seek legal advice before doing anything. I'm sure any lender will want to be informed if one of its borrowers dies, but I'm not sure what redress they have if for whatever reason this information never gets to them. What happens if you just maintain the status quo for example? Is your father then breaking any law would be another one for the solicitor.

Gold_bullion

The thought also occurs that another pressing issue is what is the current buildings insurance situation on the house? If it was insured in your mother's name only when she was alive, when she died the policy will have ceased as she was sole policyholder (even if premiums continued to be paid under the false impression she was still living). It may be that she was able to take out a joint house insurance policy with your Dad, but either way it would be worth checking. Bear in mind that the lender is supposed to be put on the buildings policy as an interested party, although this doesn't always happen and some lenders don't chase this. If it was in your mother's name only (whether or not the lender was made an interested party), the property could now be uninsured, which of course is risky and definitely not recommended (and will breach the terms of the mortgage). If the policy was in joint names then it would still be covered - I'm guessing that if they had a joint bank account that payments out simply continued after your mother's death as they did before.

I hadn't really appreciated it before but your dilemma demonstrates that the right to take over a mortgage is enshrined in the "joint and several" liability that joint mortgage borrowers undertake. This may be a good argument to include a non-earning spouse or long-standing partner as a joint borrower on a property so that your father's situation does not arise on the main earner's death. Of course the non-earner may have to sell the property anyway if they cannot afford the repayments, but at least then it is their decision not the bank's to pay the loan off early. Of course it also demonstrates why life insurance is recommended for loans secured on your main residence, although lately the banks seem to insist on evidence of this less and less.

Upsidedown_Bear

According to the OP the house and mortgage were both in mum's name only and there was no insurance policy.