Inheriting share of mortgaged property

Keep_pedalling

Smudgeismydog said:

Thanks for your comments, to try and answer some of your questions (from what she has told me);

- there was no life cover in place
- stepdad can meet the mortgage payments by himself
- relationship is not good
- her mum owned a 35% share in the property, and this is what my friend will inherit
- as far as she is aware, there is no plan to repay the mortgage, the debt will be paid off on second death from the sale proceeds
- she is not working due to ill health, so no salary, hence why she is worried about potentially being liable for this mortgage 
- she doesn’t have the assets to pay off the mortgage 


Thanks, it is an interesting one

How old is he? If he is in his late 70s or 80s he is going to struggle to get any sort of mortgage so his hand maybe forced by his mortgage company and he may have to sell.

Reassure her that she has no obligation of going on the mortgage, and bearing in mind that she has no income no mortgage provider would allow it anyway.

Who is administrating her mother’s estate?

Smudgeismydog

My friend is administering the estate, I believe her step-dad is late 70’s.

Many thanks for your help, she is very anxious about it

SVaz

I think that she needs to accept the possibility of inheriting nothing at all.

Sea_Shell

SVaz said:

I think that she needs to accept the possibility of inheriting nothing at all.

Eventually, there is likely to be 35% of any equity remaining in the property.

Assuming of course the property doesn't end up in negative equity 😕 

But I agree, there won't be any cash any time soon.

Hopefully it won't actually cost them money, out of their own pocket.  Inheriting something shouldn't make you worse off.

silvercar

How could she protect her share from eg the step father changing the mortgage to an equity release product that would dig into the equity?

Keep_pedalling

Smudgeismydog said:

My friend is administering the estate, I believe her step-dad is late 70’s.

Many thanks for your help, she is very anxious about it

Although being the executor of the estate is causing her a lot of anxiety, at least she is in a position that she has control of the administration and is not going to be stitched up by someone else. 

I strongly suspect that her step father does not really understand what her will has created and the difficulties the mortgage is going to create in the not too distant future. Someone really needs to explain this to him. Does he have any children? If he does is your friend on good relations with them?

Has her mother left any other significant assets in her estate? If she has then she will at least be in the position to get some professional help. 

Keep_pedalling

It might be worth directing your friend to this forum, she is bound to need more advice and it is better to do that directly than through a third party.

Linton

Sea_Shell said:

I didn't think you could inherit "debt"?

How that squares with inheriting a share of a mortgaged property is an interesting question.

The debt is effectively part of the house assigned to the lender.  So it isnt an inherited debt but if the house is sold the lender must be repaid in some way before either person gets their share.

Hoenir

Smudgeismydog said:

- stepdad can meet the mortgage payments by himself

The lender needs to be notified of the death of one of the mortgage holders as soon as possible. The debt will need to be repaid, transferred into a sole name or remortaged to a new lender. As the Deceased's Estate remains liable. The Executor's would be failing in their legal duty if they didn't deal with the matter. 

Keep_pedalling

Hoenir said:

Smudgeismydog said:

- stepdad can meet the mortgage payments by himself

The lender needs to be notified of the death of one of the mortgage holders as soon as possible. The debt will need to be repaid, transferred into a sole name or remortaged to a new lender. As the Deceased's Estate remains liable. The Executor's would be failing in their legal duty if they didn't deal with the matter. 

I don’t think that is the case, the surviving spouse is entirely responsible for the mortgage as it would have been given on a jointly and several basis.