Mortgage issues when someone has died and term ended

Rarchy

Hi,

I was wondering if anyone can give some help, me and my family have some urgent mortgage issues to sort out and not sure who to go to for advice.

My dad died in Jan and unfortunately the mortgage was not paid off. He re-mortgaged it a couple of times and there was quite a lot of outstanding debt left on it. It is now in my mums name but as she doesn’t have much of an income myself and my 2 brothers have been paying it. Originally there were 6 parts to the mortgage, comprising of various different loans and dates. At the start of the year there were four left, one was paid off in Feb and last month another one was paid off. This left the 2 largest parts, both of which are interest only repayments. The first is £75k and the second £20k. The first one’s term has expired and Northern Rock have said that they want their money back and we cannot extend this part of the loan (the other one ends in 2016).

Unfortunately none of us have £75k, or even anything close to that, so in our minds we have 3 potential things we can do

- An equity release type mortgage (not an ideal situation and something I really want to avoid)
- My mum moves out, would have to be in the next 6 months and the debt repaid with the proceeds (sounds ok but the house is not in a good condition at all so value is v low for its size and I worry we wouldn’t have enough to get a decent place for my mum esp when deducting the debt – she does want to move in the long run anyway, and a smaller house is obviously fine, but I don’t know if 6 months is enough time to do it up and sort other things out)
- myself and my brothers take on the deeds of the house and have a re-mortgate in our name. (We are not quite sure how this would work, ie if we could just take on the proportion of debt, or would we need to take on the whole value and get a deposit etc etc.)

In terms of our finances, as I said my mum doesn’t have much of an income and has limited savings. Myself and my brothers are all professionals with decent enough incomes but nothing substantial, nor any particular savings. I actually live with my mum at the mo, although not because of this, and like I say we all pay the mortgage which is fine. I really don’t like the sound of the equity release mortgage, but worried if we took it out in our name we would need a large deposit which we don’t have? My older bro already has a mortgage with his wife, my younger bro wants to buy in about a year or so as his future financial situation will allow that and I think he is a bit concerned taking one out in his name now will affect his chances of getting one in the future. I don’t have any mortgages and no plans to buy anytime soon (don’t have anything to buy with!), but want to eventually. We probably all have a bit of minimal credit card debt (I have £5k but pay it off every month), and student loans, but nothing else.

Not sure if firstly anyone can offer any advice, and secondly can point me in the right direction of who to speak with professionally? There seem to be so many mortgage advisers, but worry they all just want to get business somehow and are not truly impartial, plus some of this is v specific - just want someone independent and impartial (and preferably free if that exists?) but who knows about these kinds of things

Thanks,


R

amnblog

Get some advice from a competent broker.

If you are living there you (and possibly your brothers) have a good chance of getting a re-mortgage with mum to preserve the property.

Dave_Ham

I would suggest this is unlikely to be entirely free, but you do get what you pay for.

The biggest determining factor is what is the approximate value now and who else is living there with Mum.

I am sorry to hear of your loss, subject to the answers above I would like to think there will be a sensible solution.

dunstonh

just want someone independent and impartial (and preferably free if that exists?)

It wont be free. If you want independent and impartial advice then that comes with fee basis. However, any commission is rebated. So, it is possible that the commission rebate will come close to or even exceed the fee.

Look for a local IFA/mortgage adviser at https://www.unbiased.co.uk who also is qualified to do equity release (you may not need this but having someone qualified and authorised to advise on it makes sense). You can filter the search to include only those.