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  • FIRST POST
    meishkablue
    Taking over my deceased father's mortgage - help needed please
    • #1
    • 7th Oct 10, 8:10 AM
    Taking over my deceased father's mortgage - help needed please 7th Oct 10 at 8:10 AM
    Hello,

    I'm writing on behalf of my partner and we could really do with some advice please. His father passed away suddenly in December 2009, leaving a will. My partner is the sole executor and beneficiary of the will. We have a solicitor dealing with the monetary side of the estate as it is all very confusing for us. I will call my partner's father my father in law for the purpose of this email.

    My father in law had a mortgage on his home (where he was sole occupant) and there is £65,000 owing on this. The mortgage was not insured. There is not enough money in my father in law's savings etc to pay off the mortgage. The Halifax (who the mortgage is with) have not received any monthly payments on the mortgage since he passed away and our solicitor has been dealing with this. The Halifax are now demanding payment or some kind of payment schedule to be set up as it has been 10 months since they received their last payment. The solicitor is still working on getting back other monies due to the estate through various isa's and shares. However even with all these back, there is still not enough money to pay off the mortgage in full.

    We are wondering - are we able to take over the mortgage and go to live in my father in law's home? We have asked the solicitor this question but his reply was "it's complicated" not really the answer we are looking for!

    If the answer is yes, how do we go about this? Would we need to take out a mortgage ourselves (in which case we would be first time buyers) or would the existing mortgage with the Halifax transfer over to my partner? The house and mortgage is still in my father in law's name so would the Halifax be prepared to talk to us?

    If we cannot take over the mortgage, I suppose the only answer is to sell the property? We don't want this as then we would lose everything which we know he wouldn't have wanted for us.

    Thanks in advance.

    Helen
Page 1
    • bryanb
    • By bryanb 7th Oct 10, 8:13 AM
    • 4,804 Posts
    • 3,511 Thanks
    bryanb
    • #2
    • 7th Oct 10, 8:13 AM
    • #2
    • 7th Oct 10, 8:13 AM
    You could buy the house from the estate using a mortgage in your own names. The solicitor is right - It's complicated.
    I wouldn't worry much about the lender's demands for payment, they will be demands against the estate, not you personally. Pass them to the solicitor to deal with, that's what you will be paying for.
    This is an open forum, anyone can post and I just did !
    • Senior Paper Monitor
    • By Senior Paper Monitor 7th Oct 10, 8:18 AM
    • 2,875 Posts
    • 1,711 Thanks
    Senior Paper Monitor
    • #3
    • 7th Oct 10, 8:18 AM
    • #3
    • 7th Oct 10, 8:18 AM
    If the will is a simple as you explain, then I fail to understand how the solicitor has taken 10 months (the existance of ISAs and shareholding is not relly a problem if you know what you are doing).

    It should be simple to arrange with the Halifax to obtain a charge with relation to 'missed payments and additional fees' to be settled on distribution of the estate - they deal with this all the time.

    It will probably be a new mortage to meet the shortfall (basically you would buy the house from the estate for the cost of the shortfall that the estate has to meet), but subject to your individual statuses this should not represent a problem either.

    I have no idea what your solicitor is doing or charging - but the only bit that sounds impressive is the potential size of the bill !
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • meishkablue
    • #4
    • 7th Oct 10, 8:20 AM
    • #4
    • 7th Oct 10, 8:20 AM
    Ok thanks

    That sounds complicated and I have absolutely no idea how we would go about that, so I suppose we were right to ask the solicitor how we would go about it. The solicitor does not work very fast (this is our first time dealing with solicitors but I believe none of them work very fast) and we worry that the longer it goes on the more annoyed the lender is going to get and start suggesting the reposession word.

    If we were to buy the property from the estate, would we have to pay the current market value for it? It's valued at £130,000.

    Another question is, the 6 month grace period with the council tax ends in November and we will be liable to pay the council tax on the property. We will struggle to find the funds for this, is there anything we can do?

    Thanks.
    • Senior Paper Monitor
    • By Senior Paper Monitor 7th Oct 10, 8:37 AM
    • 2,875 Posts
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    Senior Paper Monitor
    • #5
    • 7th Oct 10, 8:37 AM
    • #5
    • 7th Oct 10, 8:37 AM
    Transfers 'within family' are generally recognised as resonable to take place with a 10% reduction on true value representing saving son 'sale costs', but surely this is not an issue anyway if you are the sole beneficiary as described.

    Any liability for council tax will fall on the estate rather than you - - but I am concerned that feel unable to meet this level of cost and yet want to take out a mortage (although obviously you will be saving on rental - presumably - at that point, but house ownership comes with costs both expected, such as insurance, general maintenance, council tax etc and unexpected, such as renovation and the odd boiler failure).

    You should note the 6 month exemption is from the date of issue of probate - which may be some time after the death (by the sound of it may not even have occured yet!).

    Not all solicitors 'fail to work at a reasonable speed' (some however still live in the past, where 'their status' lets them set their own pace and benefit from the fees driven by their own sloth) - I still fail to see why this is taking so long and, additionally, see no reason why partial distribution (including the sale of the house to you) should not take place soon after grant of probate.
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • meishkablue
    • #6
    • 7th Oct 10, 8:37 AM
    • #6
    • 7th Oct 10, 8:37 AM
    If the will is a simple as you explain, then I fail to understand how the solicitor has taken 10 months (the existance of ISAs and shareholding is not relly a problem if you know what you are doing).

    It should be simple to arrange with the Halifax to obtain a charge with relation to 'missed payments and additional fees' to be settled on distribution of the estate - they deal with this all the time.

    It will probably be a new mortage to meet the shortfall (basically you would buy the house from the estate for the cost of the shortfall that the estate has to meet), but subject to your individual statuses this should not represent a problem either.

    I have no idea what your solicitor is doing or charging - but the only bit that sounds impressive is the potential size of the bill !
    Originally posted by Senior Paper Monitor
    Could I just ask you to clarify as this is all new to me - when you say "basically you would buy the house from the estate for the cost of the shortfall that the estate has to meet" does this mean in terms of the £65,000 mortgage amount, whatever is in the estate when it's decided, for example £20,000, we would need a mortgage in our names to cover the rest of it? In the example case it would be £45,000? If so that's better news as it's less for us. Also, would we have to wait until the estate has received back all the monies owed or can we go ahead and inform the Halifax of our intentions right away?
    • Senior Paper Monitor
    • By Senior Paper Monitor 7th Oct 10, 8:52 AM
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    Senior Paper Monitor
    • #7
    • 7th Oct 10, 8:52 AM
    • #7
    • 7th Oct 10, 8:52 AM
    If the house is bequeathed to you - you can receive it in exchange for meeting any liabilities due on the estate (which appears to be solely the mortgage - any other fees, debts, distributions etc will be met from the shares/ISAs) at any time after probate, which means you will need a £65K ish mortgage at that time - or if you wait until full distribution can be made, that might be reduced to 45K ish.

    You or the solicitor can inform Halifax of the intentions at any time - be aware that you will probably get a better mortgage deal elsewhere (in view of your inexperince in such issues, and apparently tight financial situation, I would suggest using the services of a broker rather than direct to lender).
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • meishkablue
    • #8
    • 7th Oct 10, 9:29 AM
    • #8
    • 7th Oct 10, 9:29 AM
    Probate was granted on 16th May. Since then, the house has remained in the name of my father in law and nothing seems to have moved far. We are being charged a 1% value of the estate as the solicitor’s fee.

    We are currently paying rent and all bills/insurance on our current property. The idea was to take over my father in law’s property and live there. Looking at current interest rates we may end up paying less on mortgage than rent, allowing the saving to go towards a contingency for repairs etc. My partner has been dealing with the council himself and as far as he has been told, is liable to pay from 16th November. As we have had to empty the house, we have some items of furniture in storage which we are also paying rent for, even though it was cheaper to pay the “empty house” council tax rate and the storage unit instead of keeping the furniture in the house and paying full council tax rate. Even so, it’s still an extra £150 per month that we have to find.

    With no end currently in sight, I think we need to arrange a meeting with our solicitor to go through exactly where we are. I wonder if we are not been told the full facts as to why this is taking so long. The solicitor informs us that no other monies have come back into the estate, but perhaps this isn’t fully the case..

    If we are able to approach the Halifax ourselves, I may well suggest to my partner that’s the route we take. Thanks for the advice on using a mortgage broker also.
    • beecher2
    • By beecher2 7th Oct 10, 9:37 AM
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    beecher2
    • #9
    • 7th Oct 10, 9:37 AM
    • #9
    • 7th Oct 10, 9:37 AM
    Halifax's Bereavement Service might be the best place to start if you're contacting them
    http://www.halifax.co.uk/HelpCentre/bereavement.asp
    • getmore4less
    • By getmore4less 7th Oct 10, 10:29 AM
    • 37,468 Posts
    • 23,139 Thanks
    getmore4less
    I don't see why you could not have moved in immediately.

    Allthough legaly you might not be allowed as far as I can tell no one would care as long as the existing mortgage, councill tax and any utilities are paid.

    As sole benifitiary and executor it was going to be yours anyway if you can cover the short fall.

    This should not be that complicated unless there is something funny going on.

    I am doing my dad estate(have taken my time) and it is not that difficult once you get your head round the basic requirements and find all the assets. we are using solicitors to do the bits where we have limited knowlege

    From sending letters with grant of probate all but Santander released money in less than 2 weeks.

    Could you raise a mortgage for the full £65k based on your incomes and just buy the place.

    Use an offset mortgage and then when the solicitors release the funds you just offset the mortgage. how much are the other funds likley to be?


    If the solicitor is only charging 1% or are there additional expences?

    Since the net value is max £130k less depending how many other assets are there to offset the £65k debt, so if the bill is limited to £1300 that could explain why they are slow.
    • Conrad
    • By Conrad 7th Oct 10, 12:26 PM
    • 31,494 Posts
    • 55,821 Thanks
    Conrad
    Funnily enough I'm just doing one of these for clients nwhere they moved into the deceased property. This type of case is very outside the box for ordinary lenders and in particular there are complexities when it comes to thier IT systems into which your application will be input. IT designers design systems with straightforward purchases in mind.
    It can all be done but I'd recommend you use a very experienced broker - trust me, the average broker would !!!! this one up.
  • meishkablue
    Funnily enough I'm just doing one of these for clients nwhere they moved into the deceased property. This type of case is very outside the box for ordinary lenders and in particular there are complexities when it comes to thier IT systems into which your application will be input. IT designers design systems with straightforward purchases in mind.
    It can all be done but I'd recommend you use a very experienced broker - trust me, the average broker would !!!! this one up.
    Originally posted by Conrad
    Any idea how I find a decent broker in my area??! I think we'll stick to what the Halifax offer us first, if we eventually get through to the right people, decided to go it alone rather than ask the solicitor... and see where we are then
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