Death oif mortgage holder

not_waving_2

I'm more of a lurker than a poster here as I am generally clueless and bow to the posters here with better knowledge than me!

However, I have dear friend in a terrible situation and I wonder if anyone can offer any advice.

My friend lost her husband some months ago. She lives, with their children, in the house that he had bought. He was the only person on the mortgage. He had no life insurance (I believe ir may have lapsed but I am not sure) and so the mortgage debt is due. My friend is not in work and cannot get a mortgage in her own name. The house has some equity, although not as much as it should have due to the poor state of repair.

The mortgage company have given her a little time to sort things out but I doubt that their patience will last forever.

What are her options? Does she even have any?

I should add that she has not yet applied for LOA due to lack of funds but I could help her with that.

Any ideas or advice would be appreciated.

Savvy_Sue

Did he have a pension? Sometimes there's a death in service payment due.

Had he made a will?

I think that if the house is mortgaged, and there are no assets with which to pay the mortgage, then it is an 'insolvent estate'. If your friend doesn't want to make herself liable for any debts, then she must be very careful about not getting involved in trying to sort things out - which of course is not an easy thing for your friend to come to terms with. At the very least she should make an appointment with CAB, but proper paid for advice from a solicitor might be well worthwhile.

getmore4less

There is equity in the house, unless there are other debts the estate will not be insolvent.

getmore4less

I would first investigate the benefits situation and housing/mortgage support.

It might be that if the interest could be covered then the mortgage company might allow interest only to give time.

At the same time a review of is it worth keeping the place, if it needs maintenance and there is no money to do it up it might be that selling up and renting I the way forward.

A review of the hubby finances, insurance pensions etc. is quite urgent.

Agree with Sue his is one for people with expertise in things like benefits so CAB may be a good start.

not_waving_2

Thanks for the replies so far.

There was no will so my friend, as spouse, inherits the lot such as it is. The estate is not insolvent as there is some equity in the house. No pension/death in service benefits (checked). My friend would like to keep the house if at all possible but the mortgage debt became due in full at the time of her husband's death. She would be able to continue to pay the mortgage but the bank will not allow that and she would not be able to get a mortgage in her name. Because the mortgage is not in her name then the bank will not accept payments from her.

I was just wondering what happens now. The estate is in limbo (no letters of administration yet) so what needs to be done? Can the bank apply to administer the estate to get the house sold and mortgage repaid? If my friend does this herself how long does she have to sell the house? She really wants to keep the home that was their family home for many years and I am worried that it will not be possible.

TonyMMM

Yes the bank could apply to administer the estate, but would only do so if absolutely necessary.

In reality, she has only inherited the equity in the property, so unless she can raise the funds to finance the rest she is going to have to sell.

Dealing with it herself is probably the best option - if the bank have to step in they will take their (large) costs from the estate, and sell the property as a repossession and she may be left with next to nothing.

not_waving_2

Thank you, that is what I feared but I was hoping I had missed something that would allow her to keep the house.

not_waving_2

Can I just ask another question please.

What will actually happen eventually if my friend refuses to sell the house? I assume the mortgage company will repossess but I was wondering about the timescales, and also whether she would be considered intentionally homeless.

FreeBear

To repossess is a fairly long winded affair if the mortgage company follows the correct legal process - At some stage, they would have to put the matter in front of a judge which gives your friend opportunity to put her case.

If proper procedure is followed, it is unlikely she would be considered intentionally homeless. Depending on the age of the children, it may be worth approaching the local council now and see if they would offer any help.

PasturesNew

How much is the mortgage? There's a world of difference in options between £40k and £300k.

not_waving_2

The outstanding mortgage is a little over 36k,