Executor of will with equity release property.

Hi, 

My father died last year and left a property which has a equity release mortgage on it. I am executor of his will.

The anniversary of his death is in 2 months time when the equity release company will take control of the property. Probate will not be completed by then so my question is what happens when the equity release company takes charge of the property. I put this question to the equity release company who just said contact a solicitor?

The value of the mortgage is just short of 70k the value of the property is around 280k. 

I don't have a property to re mortgage to pay the equity release before the year anniversary.

The equity release company have said there is little chance of them extending the payback date even though they are still charging interest - and they won't even discuss this until the anniversary date.

Will all the value of the property be lost?

TIA

Comments

  • dunstonh
    dunstonh Posts: 115,646
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    The anniversary of his death is in 2 months time when the equity release company will take control of the property. Probate will not be completed by then so my question is what happens when the equity release company takes charge of the property. I put this question to the equity release company who just said contact a solicitor?
    Most lenders target 12 months but will extend if they know the delays are being managed and are acceptable.
    Normally, the lenders would not start repossession of the property unless they believe the executor is not acting correctly or in a timely manner.     Repossession is a last resort option for a lender.  Even with equity release.

    Probate is taking about 2 months currently.   So, the fact it has not been obtained coming up to a year could be a reason why they are taking a harder line.

    They are referring you to a solicitor as its not their place to give legal advice.

    Will all the value of the property be lost?
    No.  The property will be put up for sale at quick sale price.   Costs of sale will be higher than if you, as executor, was doing it.  They will be deducted from the sale price along with the repayment of the debt.   The residual amount will be paid to the executor to allow distribution to the beneficiaries.

    Ideally, you don't want them to do this and there is likely to be a reason why they are taking a harder line.   Do, you have any idea why that could be?     (it could be timescale as mentioned but can you think of anything else)
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Keep_pedalling
    Keep_pedalling Posts: 16,171
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    Why is probate taking so long?

    No you won’t loose the entire value of the house, but you will be better off having control on any sale. The house cannot be sold until probate has been obtained. If you are planning to move into the property then you should be able to obtain your own mortgage to pay off the loan.
  • MWT
    MWT Posts: 9,108
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    edited 2 January at 11:57AM
    DCG101 said:
    The value of the mortgage is just short of 70k the value of the property is around 280k. 

    Hopefully that is the balance on the account (updated with interest as it accrues) rather than the amount borrowed.
    As dunstonh has said, your effort should be directed to convincing them that they are going to get paid soon.
    Hopefully you have obtained probate but simply not completed the rest of the process through to distribution of the estate, so for example the property is on the market but not yet sold?
    ... if you have not even obtained probate at this point then I can see why the lender is not being flexible.



  • Hoenir
    Hoenir Posts: 1,186
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    edited 2 January at 12:57PM
    When was probate applied for?  The lender would appear to be believe that matters are being dragged out and therefore intend to enforce their contractual rights. 
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