Father passed away... joint mortgage what happens?

tasticz

My parents have joint mortgage for the property we live in (HSBC) and a buy to let property (Barclays).

My dad was the main applicant and my mom was secondary for both cases.

My moms yearly salary is for 2019/20 is around £25k salary + £20k dividends.

We have £140k mortgage left on the residental property and is repayment. The BTL is interest only and has £330k remaining with tenants in place.

I know I need to speak with the bereavement team in the bank but what happens to the mortgage? Will they just transfer it to my mum and as long as she pays the money every month there won't be any issue or will they make her do a new application and ask her to prove affordability? 

We are scared due to this present time... I am happy to go on the mortgage with her if required but my salary is no where near what my dad was earning...

elsien

Did your dad not have any life insurance to cover these eventualities? 
That's not a criticism, just asking if your mother has thought to check.

tasticz

elsien said:

Did your dad not have any life insurance to cover these eventualities? 
That's not a criticism, just asking if your mother has thought to check.

Its ok. and unfortunately, it was for a very small amount £10k. so no he did not. His pension pot is also around £25k ish. no other insurances.

Do you know if the mortgage company will let us continue the mortgages?

elsien

There is some information here, if you scroll down the page which unfortunately for your mum says a fresh application will be needed. She may need to be thinking about selling the BTL property at some point.

https://www.moneyadviceservice.org.uk/en/articles/dealing-with-finances-and-insurance-after-your-partner-dies

Thrugelmir

No issues with the tenants in the BTL I hope. A mortgage of that size could soon cause serious financial damage,. 

tasticz

No issues with the BTL payments yet.

I done the calculation just now and my mums income and mine is sufficient for us to survive and pay all monthly costs plus potentially some savings.

Should I speak witg mortgage broker before speaking with bank?

minimike2

elsien said:

There is some information here, if you scroll down the page which unfortunately for your mum says a fresh application will be needed. She may need to be thinking about selling the BTL property at some point.

https://www.moneyadviceservice.org.uk/en/articles/dealing-with-finances-and-insurance-after-your-partner-dies

The MAS should not be directly stating such specific direction on the matter when they do not know the policies of every lender. This piece of information should not be relied upon as accurate by anyone reading this in future.

Sorry for your loss OP.
Best thing to do in the first instance is to contact the lender directly and inform them of the situation up front. They will advise the options available. You can then go from there.

[Deleted User]

I used to work for Halifax years ago and if no changed were made we would just leave the mortgage as Mr Smith (deceased) and Mrs Smith. No reason to force a sale if the debts are being managed and paid. This may have changed to be fair. 

If its tenants in common then completely different situation as someone else may want a share of the equity before you even start negotiating with lenders. 

If i was in your shoes, i would get mum to contact the bank first and ask what they do by default.   It might be that the default option is fine so you dont need to go much further.  A mortgage broker wont be much use for the residential mortgage unless you are moving to a new lender or looking for a better deal. This internal stuff isnt the kind of thing the lenders would let us get involved with. 


The BTL should be easier as those calculations are based mainly on the rent coming in so moving to a new lender and putting it in her name shouldnt be a problem (assuming the calculations stack up).   A mortgage broker is best to speak to with this when it gets to the end of the current product period.

TuppenceWorth

Dear tasticz,
I signed back in after a long time to offer my condolences. Sorry to hear about your loss and I hope your mum pulls through both emotionally and financially.
Regards