Inherit house I live in

shell18

Hi, my family and I live with my elderly aunt. The house has a mortgage in my aunts name. I will inherit the house when she passes (she is quite unwell with an incurable illness). We don't have any formal rental agreement in place but we pay all the mortgage and 50/50 household bills. If she passes, can we carry on living in the house until we either sell it or get our own mortgage on it or will be "evicted"? Should we get an official rental agreement in place? Should I try and get my own mortgage on the house before she passes? Is there anything else I need to be mindful of? Sorry if this post sounds insensitive but I need to plan just in case. Thanks.

ThisIsWeird

I don't know the answer, but just to say it's not insensitive to be informed. Of course you all need to plan - there will be enough upset and dealings with the funeral without also being concerned about the roof over your head.

I suspect, since she's presumably covered this in her will, that you'll be fine, but hopefully others will have more info.

shell18

ThisIsWeird said:

I don't know the answer, but just to say it's not insensitive to be informed. Of course you all need to plan - there will be enough upset and dealings with the funeral without also be concerned about the roof over your head.

I suspect, since she's presumably covered this in her will, that you'll be fine, but hopefully others will have more info.

Thank you - Yes, she has a will

Keep_pedalling

No you don’t need a rental agreement, who do you think will evict you? Who has she appointed as executors of the will?

Her mortgage provider will need to be notified of her death, at which point payments will stop. Once probate has been obtained the mortgage will need to be payed off either through sale of the house or by the executor / beneficiary paying it off. 

shell18

Keep_pedalling said:

No you don’t need a rental agreement, who do you think will evict you? Who has she appointed as executors of the will?

Her mortgage provider will need to be notified of her death, at which point payments will stop. Once probate has been obtained the mortgage will need to be payed off either through sale of the house or by the executor / beneficiary paying it off. 

I wondered if the mortgage company would evict us because we would technically be living in a house "free" until everything sorted out. I am executor and sole beneficiary

PRAISETHESUN

As it stands you have a valid tenancy agreement (verbal contracts can exist), so evicting you would actually be fairly difficult. No sane person would buy a property with an existing tenant and no information documenting the agreement, so realistically that leaves either you purchasing the property with a mortgage, or the bank forecloses on the property and you get kicked out that way. They will have a process in place for deaths but as long as the estate keeps up on it's obligations for repayments I can't see them trying to go down that route.

Ideally the estate will sell the property to you when she passes. Definitely doesn't hurt to explore your options now, potentially looking to get advice from brokers on the best mortgage options for you, but I wouldn't lock anything in until it's required.

user1977

You (as executor) will need to repay her mortgage (and any other debts of the estate) - if you can get your own mortgage then that's the simplest way of doing so.

Keep_pedalling

shell18 said:

Keep_pedalling said:

No you don’t need a rental agreement, who do you think will evict you? Who has she appointed as executors of the will?

Her mortgage provider will need to be notified of her death, at which point payments will stop. Once probate has been obtained the mortgage will need to be payed off either through sale of the house or by the executor / beneficiary paying it off. 

I wondered if the mortgage company would evict us because we would technically be living in a house "free" until everything sorted out. I am executor and sole beneficiary

No they won’t providing you deal with the matter in a reasonable time frame. The biggest hold up is going to be obtaining probate and you won’t be able to get a mortgage or sell the house until you have that. 

The other issue you might face will be IHT if her estate is in excess of £325k (£650k if she is a widow) 

Albermarle

shell18 said:

Keep_pedalling said:

No you don’t need a rental agreement, who do you think will evict you? Who has she appointed as executors of the will?

Her mortgage provider will need to be notified of her death, at which point payments will stop. Once probate has been obtained the mortgage will need to be payed off either through sale of the house or by the executor / beneficiary paying it off. 

I wondered if the mortgage company would evict us because we would technically be living in a house "free" until everything sorted out. I am executor and sole beneficiary

Remember when dealing with the estate, you will be legally two different people. The executor of the estate, and a beneficiary of the state. Try not to mix them up . Open an executors bank account, so there is no confusion with your own.

I noticed two conflicting comments in the posts about what happens about the mortgage payments when she dies.

'Her mortgage provider will need to be notified of her death, at which point payments will stop'

They will have a process in place for deaths but as long as the estate keeps up on it's obligations for repayments I can't see them trying to go down that route.

You will need some clarification on that ( I do not know the answer) .

user1977

Albermarle said:

shell18 said:

Keep_pedalling said:

No you don’t need a rental agreement, who do you think will evict you? Who has she appointed as executors of the will?

Her mortgage provider will need to be notified of her death, at which point payments will stop. Once probate has been obtained the mortgage will need to be payed off either through sale of the house or by the executor / beneficiary paying it off. 

I wondered if the mortgage company would evict us because we would technically be living in a house "free" until everything sorted out. I am executor and sole beneficiary

I noticed two conflicting comments in the posts about what happens about the mortgage payments when she dies.

'Her mortgage provider will need to be notified of her death, at which point payments will stop'

They will have a process in place for deaths but as long as the estate keeps up on it's obligations for repayments I can't see them trying to go down that route.

You will need some clarification on that ( I do not know the answer) .

In practice a lender will tolerate arrears for a reasonable period while the estate is going through probate. They can't reasonably expect payments to continue while the executors don't have access to liquid funds. They will at some point start asking questions if the executors appear to be delaying matters and ultimately could still repossess, but repossession is expensive and risky for lenders - much easier for them to sit back and await the account being redeemed.

shell18

Thank you all for your comments. I appreciate you taking the time to offer advice