Property after death

julieannfit

My husband is terminally ill. He has a repayment only mortgage for our home and no life insurance. After speaking with the mortgage lender, I am told the house will need to be sold to pay the 266.000 he owes. The current value of the house is 500.000 
The estate does not have enough money to pay the mortgage lender, so I understand that they will need to be paid. However, they tell me I have to apply for probate and then they will give me 6 months after his death to sell the house.
This indicates to us that they would then sell the house to someone at 266.000 to cover what is owed to them and not the market value. My husband to scared that the bank will sell the house and his children and I will not get our inheritance.  This is causing him much worry and stress and he now wishes to put the house on the market. However, I fear he will pass before the contracts are exchanged and I will still have to apply for probate. 
What legally can the bank do in this scenario. I cannot remortgage in my own name as I am his full-time carer on benefits.

sheramber

If you do not sell in 6 months they will repossess the house and sell it to cover the outstanding costs. They will not be concerned in getting the full price for it. They only want to cover their costs.
if the price it is sold for is less than the outstanding amount they will apply for payment to your husband's estate.   If there is not money in the state to pay the balance it will be written off.

MovingForwards

Has your husband made a will? That will make it a lot easier to deal with his estate, when the time comes.

In the interim, it may be better to sell and move now, if he passes partway through the sale then probate will need to be obtained to complete the sale.
Your husband buys a cheaper / smaller property as a cash buyer, it's put in both names as joint owners and automatically passes to you when he passes or it remains in his name and you are granted a life interest to stay in it, then it's passed to the kids (this is why a will would be a good thing)

It may be easier all round to do it now, than trying to grieve, be under pressure to sell and find somewhere else later.

Has your husband looked at his pensions to see what, if anything, is payable now due to his diagnosis and what will be paid, if anything, to you / the kids when he passes? 
Checked to make sure all the beneficiaries are who he wants them to be.

I'm sorry you are both in this situation.

Keep_pedalling

You will not need probate to sell the house as it is not required when a spouse inherits. You may still need it if he holds assets like shares, but that does not effect the status of the house. Do you own it jointly? If you do, and it is held as joint tenants then you will automatically become the sole owner on his death. 

Savvy_Sue

Having said all that, once you have applied for probate, you have the chance to sell the house and can maximise its value. If it's worth £500,000 and the mortgage is £266,000, then you have the balance available to you. Would you be able to buy anything for that price? 

How old are your children? 

I am sorry for the situation you find yourself in. 

TBagpuss

IF you don't sell and they repossess, then they can't just sell at a very low price in order to get their money back, so they couldn't sell at £266 and leave you with nothing.

However, if it was valued and marketed at £500K and they got an offer for (say) £480K they might agree to sell where a private seller might try to negotiate or be willing to wait a bit longer for better offer. 
I understand that you probably don't want to be trying to market the house while your husband so ill, but it is likely that it will be in your interests to get it on the market as soon as you an once he passes, so that you, rather than the lender, get to deal with the sale (also that will allow you to stay in the house until you sell, and are able to buy and move to a new property, whereas if the lender repossess then you would have to move out and would have to rent until the house sold and you go your money.

Since evicting a grieving widow is not a good look, you may find that in practice, as long as they can see that you are actively marketing the property and trying to sell it, that they would not repossess even if you haven't managed to find a buyer within 6 months of your husband's death.  Where a lender applied for a repossession order, one thing the court has to consider is whether there is a realistic prospect of the debt being repaid in a reasonable time. If there is, it may be appropriate to make a suspended, rather than immediate, possesion order, and of course if you are actively marketing the house then it is reasonable to argue that you will be able to repay the debt. 

Is the house in his sole name, or in joint names? If it is possible to put the house into joint names now that may make things easier for you, but normally that would mean that the mortgage would also need to be transferred which may not be in your interests. 

You could put the house on the market if your husband wants - you would be able to plan to exchange and complete on the same to to avoid any risk of his dying between exchange and completion (and if marketing the property will give him comfort, it may be worth doing it for tht reason alone. If he did then die and the sale fell through because of the delay caused by getting probate, that's stressful for you, but you may feel that it is worth it if it has allowed him to be less worried.

(Duty of Mortgage Lenders on repossession - based on Council of Mortgage Lender rules: The lender owes the borrower a duty of care and is accountable to the borrower for its conduct in dealing with the sale, but that duty does not extend to obtaining the best possible price on sale – it must obtain the ‘true market value’ or ‘proper price’. In general, as long as the lender obtains a valuation of the property and exercises reasonable judgment, and does a reasonable job in marketing the property, it will have done its duty.)
I hop that you are able to reassure your husband that you and his children won't lose out on your inheritance. 

ontheroad1970

They are also obliged to advertise the proposed accepted offer in a local newspaper giving 7 days notice for the potential for a higher offer.  My wife and I bought aa repossessed house some years ago and this was something we had to wait out.  

AskAsk

Mickey666 said:

Comms69 said:

julieannfit said:

My husband is terminally ill. He has a repayment only mortgage for our home and no life insurance. After speaking with the mortgage lender, I am told the house will need to be sold to pay the 266.000 he owes. The current value of the house is 500.000 
The estate does not have enough money to pay the mortgage lender, so I understand that they will need to be paid. However, they tell me I have to apply for probate and then they will give me 6 months after his death to sell the house.
This indicates to us that they would then sell the house to someone at 266.000 to cover what is owed to them and not the market value. My husband to scared that the bank will sell the house and his children and I will not get our inheritance.  This is causing him much worry and stress and he now wishes to put the house on the market. However, I fear he will pass before the contracts are exchanged and I will still have to apply for probate. 
What legally can the bank do in this scenario. I cannot remortgage in my own name as I am his full-time carer on benefits.

They are obliged to get the best possible price. It's literally a quick google search away...

‘Best possible’ under what circumstances?  I’ve always thought repossessions would be sold through auction.  I can’t imagine them hanging on to a repossessed property for a couple of years just to get the ‘best possible’ price, as an owner might do.

they are often sold through auctions but they can also be sold normally, except they are priced for a quick sale.  so the best possible price is only when people bid them up.  they are not obliged to hang out for the best price like you would do if you sold your own house.  these properties are therefore often cheaper than normal properties but depending on the area they are in and demand for such properties at the time they go on sale, they can achieve reasonable prices compared to normal houses.