What happens when a mortgage guarantor dies?

Larry123

Hi. I've read a few threads on this but nothing is giving me a close enough idea to my exact situation. Hoping someone here might be able to give me a little advice

Fairly simple situation. Father is guarantor for at least 4 mortgages belonging to my brother. My father is losing his health and I am worried as to what will happen when he dies. The estate is promised to myself, the brother mentioned and another brother, three in total; to be shared equally upon my fathers death. Mother has sadly already died. Assets may not be sold immediately.

What happens if my brother were to default on one or all of the mortgages after my fathers death? Does the mortgage company have a claim on the whole estate or just my brothers third? We have plans to develop some land once inherited; will the mortgage companies have a claim on that land as it belongs to my fathers estate and further more, if we develop it, will the mortgage companies have a claim to its new value.

Any help on this matter would be appreciated. I have tried to apply logic to some hypothetical scenarios and the outcome doesn't seem too promising for myself and the 3rd brother. Obviously logic rarely plays a part in this sort of thing.

Many thanks

AMILLIONDOLLARS

Find a good lawyer, it will turn out cheaper in the long run! Has your father written a Will? A promise is worth nothing unless it is written down!

AMD

Larry123

AMILLIONDOLLARS wrote: »

Find a good lawyer, it will turn out cheaper in the long run! Has your father written a Will? A promise is worth nothing unless it is written down!

AMD

Yes, he has written a will though I am worried it will be void against any mortgage company's claim. The biggest problem I face is that I do not have any money to pay for a lawyer. We are going through some very hard times at the moment; under control, but hard.

Unfortunately, it is not something that we can discus with the brother with mortgages. He is unfortunately not a trust worthy person and will not give us straight answers. Our father is getting too old to want to talk about any of it. The third brother has enough money not to care about the whole thing.

We will look toward finding a lawyer when the funds become available, hopefully soon if someone buys our bloody house

Do you know if there is a definite answer to my query or is it a case of it completely depending on terms and conditions of the mortgage and/or what was agreed at the time of the mortgage being taken out?

Thanks

stator

Generally obligations of the guarantor will continue after death to the estate but it would depend on the individual agreement and I don't know how mortgages are generally written in that respect.

getmore4less

Get the paperwork he signed and have a good read of the terms.

A good google might bring up something on the general principles around this area of liability on death.

Larry123

I am going to try and bring it up with the two brothers in a casual way so not to cause offence and see if we can go through the paperwork together. The fact my brother wont even disclose how many properties he owns, gives me little faith this will be a successful plan but it is all I can do at the moment.

I dislike the whole situation and I am not a money orientated person. It seems such a horrible thing to be talking about, fighting over money with family, especially when connected to the result of my fathers death. But I am a man of principal and things like this need to be addressed.

Thanks for the replies. I will keep pursuing information on the matter but any more information will always be appreciated.

Cheers

Voyager2002

Do you have any reason to believe that the brother with the mortgages is likely to default? Doing so would injure him as well as everyone else...

Larry123

Voyager2002 wrote: »

Do you have any reason to believe that the brother with the mortgages is likely to default? Doing so would injure him as well as everyone else...

His financial situation is poor. He is currently receiving financial help from our dad to stay afloat, despite living with him rent free. His properties are buy to let, low value, low rent with unreliable short-term tenants. There is always the chance he will default.

I am hoping the fact that defaulting will cause much trouble for him will be reason enough for him to discuss the matter with myself and our brother. If talks are successful then we can look into a solution to the issue, of which I know there is one. Fingers crossed.

getmore4less

A google turned up some info on how to handle the IHT side on HMRC site.

Larry123

getmore4less wrote: »

A google turned up some info on how to handle the IHT side on HMRC site.

Thanks, I'll take a look.