Lifetime mortgage query

Richba50

My mother in law sadly passed away last November, her flat is for sale at £105000 and she had a lifetime mortgage accruing interest at 6.88%, current balance is just under £50k. She also had savings of £30k. Should we instruct our solicitor to put some or all of the savings into the mortgage? Thanks,

MWT

You can talk to the lender to see if it is possible to make an interim payment to reduce the amount owed, and to check if there would be any limit to that before there might be an early repayment penalty.

Given she has already passed I would not expect there to be a penalty, but always best to ask.

I assume you have already informed them of her demise and that the flat is on the market?

Richba50

Yes, there’s no early repayment fees and we can make payments to the mortgage at any time, just not sure how much we should put into the mortgage! Thanks,

Brie

Savings of £30k isn't a huge amount and may be needed to cover funeral costs, sale costs (dressing the place to get the sale), ongoing bills (utility, water, insurance, solititor, tax). So I'd be very cautious about giving it away even to reduce interest payments until you know that the sale is happening.

Sorry for you loss - hope you get all the stuff sorted out.

Richba50

Thanks, all of the above has been done except to sell some furniture. It’s only been on the market for 2 months, so think I’ll wait another couple of months and see if it’s likely to sell quickly. Thanks for all the advice

MWT

Do stay in touch with the lender throughout the sale process as there is usually an obligation to repay the mortgage within a relatively short time period, sometimes as little as 6 months after death, but you'll usually find the lenders have some flexibility as long as you communicate with them and they can see that your efforts to sell and the price being asked are reasonable.