DP's long dead sister still on mortgage

[dizzydizzydizzy]

DP's sister owned half the house. She died many years ago. She left it to DP in her will. DP has been paying the mortgage ever since. He hasn't let the mortgage company know that his sister has died. Is he going to be in big trouble when they find out?

Once he is paying the mortgage it should be fine but why on earth not tell them? It is of no benefit having a deceased person on a mortgage or title deeds of a property.

Wasn't there a life policy to pay off the mortgage?

They really should have been notified but better late than never. Title to the property should be transferred in to his name.

God yeah I never thought of the life insurance. Wow. He needs to ring them asap.

Was / is the mortgage a joint mortgage held by the two of them? He isn’t going to be in “big trouble”, but if there’s a mortgage outstanding then that either needs to be paid off or to be remortgaged into his sole name. That could potentially be tricky, if he wouldn’t qualify on his own. Is that possibly why he has stalled informing them until now?

How would it need to be remortgaged into his name? Upon providing the death cert her name just needs to be removed.

“DP has been paying the mortgage ever since” suggests there’s a mortgage still outstanding. It isn’t clear whether the mortgage was a joint one held by DP and his sister together on a jointly owned house they both lived in, or not. But the mortgage doesn’t disappear just because the sister has died. It still needs to be repaid - either by her life insurance, sale of the property, or remortgage into the co-owner’s sole name.

Why didn't he let anyone know? The mortgage might have been reduced if he had... can't understand what's happened here.
What happened at the point of probate? Are the deeds corrected to be in his name only?
You need both a solicitor and financial advisor to give you expert advice I think

I know this yes but in a case like divorce you have to get a whole new mortgage to remove the other person but in the case of a death they can remove her name from the mortgage and they do not need to reasses him for the rest especially as he has been paying the mortgage alone anyway since she died.

I do wonder why he did not consult them before as if she had a life policy it could have helped.

Surely they had to have an insurance policy against this?

Thanks all.

No life insurance policy.

I've no idea why he has never bothered to inform the mortgage company. I did ask him but didn't really get an answer.

Was his sister removed from the house deeds with the land registry? Presumably that would have been done when her will went through probate?

I can't see any issues arising from her name still being on the mortgage, but all the same, it makes sense to let the lender know.

My mum has a rental property that pays towards her care fees. I have never had anything to do with it, but my late husband and I were on the mortgage and deeds, though my mum solely paid the mortgage (now finished) and has all the income from the house.

When my DH died he was removed from the deeds and the mortgage. However there was no requirement to remortgage. Things just carried on as they were.

LAnd Registry entry should have been updated on sister's death by the executor of her will. Depending on the type of joint title it may have passed automatically on death anyway.

I guess if the brother lived there, paying the mortgage and bills etc as before the process was overlooked or treated as not worth the agg.

Shouldn't be difficult to sort out the title provided there's a proven will and grant but it's probably the sort of paper chase best entrusted to a Solicitor.

Are you absolutely sure on the life insurance? I had to get one when I got a mortgage...

He won't need to remortgage. He just needs to tell the mortgage company and they'll remove her name from the account. Then advise the Land Registry and they'll change the register in line with either the ownership or the will.

I didn't take DH of for ages after he died, just because I never got round to it.

The risk is that the lender may not think DH's income minus his expenditure leaves a sufficient amount each month to satisfy their risk profile. That may be why he hasn't let them know.
When the mortgage was initially taken out in joint names, both incomes would have been taken into account. He might be judged unable to afford the mortgage o his own, even though he is currently paying it - the risk of him being unable to pay may be too high for the lender to accept (different lenders work to different risk profiles).

There may also be a problem if DH couldn't pay the mortgage for some reason - redundancy say - as the other borrower has died, and is therefore no longer able to cover the monthly cost.
Don't know what they'd do about it though, but I think it could be considered fraud to keep his sister on the mortgage as he's borrowing money under false pretences (ie that two people are jointly liable for the repayment).

Yes, absolutely sure there is no life insurance. And certain the sister is still on the mortgage because she is still getting letters
Informing her of the rate changes.

Thanks for everyone's comments. It sounds like it may not be as big a deal as I thought it was.

That used to be the case.

ISTR my Dad explaining that was how mortgages worked but that was in the seventies when the lender was almost always a Building Society and the operated as a cartel.

We bought our first place c1986 at exactly the time the BS cartel fell apart. Simple term insurance on first death wasn't something I remember being offered as an optional spend but rather as part of a package. But maybe the 'threat' of what could happen to Mrs B if I stepped out in front of a London Bus was enough.

Since then though there's been a massive expansion of choice in the lending market and borrowers have much more choice.

technically if the mortgage was outstanding at her death her estate should have settled it before paying anything else out so that is a bit weird as well - who were her executors?

I don't think that's true if it was a joint debt? You don't have to settle the mortgage when your husband dies, for example.

It certainly wasn't true when my husband died. I didn't have to settle the mortgage.

it does depend how the debt is held re mortgage one way it should be settled the other possibly not. it depends on how its held but this should have been investigated by the executor

The executor of the will was DP! Perhaps @KnickerlessParsons is right.

Thanks for everyone's comments. It sounds like it may not be as big a deal as I thought it was.

It is a big deal. Read my previous reply.