Loans and probate

RockRebel

My Mum had a secured loan on a holiday home she bought for us. She signed the finance agreement and we agreed to pay her monthly as per the agreement terms. We were unable to get finance at the time. Mum passed away 5 weeks ago leaving an outstanding balance, we have approached the finance company, but feel they are being unreasonable in want the balance paid in full. There is no compromise, despite what the details say on the probate teams website. We have paid over a third so they cannot reposess without a court order. Does anyone have any advice

BrassicWoman

you need to either repay them by borrowing elsewhere, or sell the home. I would sell it yourself to avoid expensive court and lawyer fees.

DCFC79

RockRebel wrote: »

My Mum had a secured loan on a holiday home she bought for us. She signed the finance agreement and we agreed to pay her monthly as per the agreement terms. We were unable to get finance at the time. Mum passed away 5 weeks ago leaving an outstanding balance, we have approached the finance company, but feel they are being unreasonable in want the balance paid in full. There is no compromise, despite what the details say on the probate teams website. We have paid over a third so they cannot reposess without a court order. Does anyone have any advice

Have you read the advice posted in response to your other post ?

foxy-stoat

Sorry to here about your loss.

Who are the Executors of your Mum's Estate? They are the ones who need to settle all your Mum's debts, sell assets and divide up what ever is left as per the Will, if there was one. If not it will go to the next of Kin.

Assuming your late Mum owned the holiday home as she took out a secured loan for you. The finance agreement was between her and the lender, in the event of death then the property is normally sold and any secured loans settled.

The Executors need to deal with this, they can continue to make the monthly payments until the place is sold, so I would in your position advise that the property will be sold on the open market, continue to make the monthly payments and give then updates every month or 2. Now if the property doesnt sell in the next 6-12 months due to the market, just keep paying them and keep them advised.

They will not force a sale if they are still getting paid. How long has the loan got left, can you not take out a unsecured loan to clear it and keep the holiday home?

jonesMUFCforever

The executors have no powers to make monthly repayments until grant of probate.

foxy-stoat

jonesMUFCforever wrote: »

The executors have no powers to make monthly repayments until grant of probate.

Agreed, but if the OP is going to be one of the Executors and are trying to save the property from being sold as it "was bought for them", and have been paying the loan repayments then it may be a good idea to make token monthly payments to save on any added interest and charges.

RockRebel

They will not allow us to makw any further pyments, they have closed the finance agreement.

foxy-stoat

RockRebel wrote: »

They will not allow us to makw any further pyments, they have closed the finance agreement.

So if you want to keep the property, you will need to take out a loan for the outstanding balance and settle the debt.

Brock_and_Roll

I have been in this situation myself with regards to my late father's Estate.


In a nutshell, I was able to strike a deal with the bank for a period of time whilst works were carried out to them property. A factor that assisted me in getting this (temporary) leeway was that another elderly person was living in the property.


However, this was exceptional and temporary - the basic principal remains the same that the Executor is responsible for realising the assets of the estate and settling its debts. So foxy stoats advice above is correct.

foxy-stoat

Had this in the past - person died, I was an Excector - mortgage wasnt paid for a year - issued posession order - got them to postpone and paid them £5,000 and told them to wait for a few months. Had to fill in a form for them to accept payment - you have to be an Executor though. NO finance company in the land will refuse to accept money to go towards clearing a debt, maybe not regular monthly payments but a lump sum should be ok.

So keep paying the monthly amounts to a seperate account, after 3 or 4 months call them up and offer the lump of money. Keep them update with the details of the sale as well.