Mortgaged house upon death - what happens?

[AndNoneForGretchenWieners]

DH is seriously ill and hasn't got very long to live. We have been married for nearly 18 years, and have lived in our house for just over 18 years. Due to my financial messiness at the time (my ex left me with loads of debt) I couldn't get a mortgage, so DH bought the house on his own, but named me on the deeds.

We stupidly don't have life insurance (We did take it out when we bought the house, but our circumstances changed and we couldn't afford to pay the premiums so it lapsed, and we forgot all about it and didn't reinstate it).

There isn't a huge amount of capital left to repay (under £20k) and DH has a repayment mortgage with 7 years left on the term. We did overpay for a while but then the bank told us we would be charged for overpayments so we stopped. Since then, we have just made the required payments.

DH has had to retire early and has very little income, just his occupational pension and ESA/PIP. I earn a good salary and all our money is pooled completely. He wants to make sure that on his death, I inherit the house and can stay in it, and we have started the ball rolling on getting me added to the mortgage now. The problem is it can take up to 8 weeks, and we may not have that long. I asked the bank what would happen if he died before it was finalised, and all they would say was they had a special bereavement team to deal with that and not to worry.

I will inherit sufficient money from his pension to pay the mortgage off if I can't be added to it and continue to pay as normal, but would the house revert to the bank when he dies if I'm not added to the mortgage in time? What happens? Would I be asked to pay the remaining capital as a lump sum and then the house would be mine? Can he just leave the house to me in his will, even though there is a mortgage? I am a bit worried that we will end up on the streets... I am sorting life insurance for me and DS tomorrow, by the way.

You do need speedy legal advice. When you say your name is on the deeds, is this as joint owner? If he leaves you all his property then there should be no problem, no matter who has been paying the mortgage - it becomes yours. It sounds as though the bank is being helpful and they will let you pay off what is left.

I am so sorry that you are in this sad and difficult situation.

I am not sure exactly what it states on the deeds, I've been trying to contact Land Registry to check because the paperwork is in my parents' safe and they are on holiday this week. I remember having to go to a solicitor to have it witnessed at the time, I think it's as joint owners but it was so long ago I've forgotten.

I have filled in the forms for lasting power of attorney (DH got them from the Macmillan advisor who visited him in hospital) and am going to ask my friend who is a solicitor to witness them. She's not a conveyancing specialist however so I think I will need to get a separate solicitor for the house stuff. The one who did all our conveyancing originally is still around so I will probably go back to him.

He's leaving me everything apart from a provision in one of his pensions for the kids. He has a private pension as well as an occupational one, I won't be loaded but also won't be destitute.

These conversations have been so difficult. I feel like it's insensitive to be talking openly about what I will inherit when he goes, but he is really keen to get everything sorted now while he is still of sound mind. He has two brain tumours, he's only being treated with steroids at the moment because he has pneumonia and they can't start any intensive treatment until he is better - but every day he is without treatment, his chances of survival are reducing. It's so shit

Does your dh have a life Insurance policy? A will in place?

No life insurance, but he is sorting a will this week. Macmillan are doing a free will writing service this month.

My dh died last year and his life Insurance policy paid off the remainder of the mortgage and our jointly owned house passed to me in his estate. I think if you get a will in place then the house will automatically become yours.
The legal section and also life limiting illnesses sections were invaluable to me.
It may seem insensitive to some people to talk about these things but in the circumstances you have to and it quickly becomes the norm.
It’s a situation I never expected to be in.

Are you definitely on the deeds and in what capacity? When were you added and does the bank know about it?

Usually the bank won’t permit you to be on the deeds if you aren’t on the mortgage, because that means you own the house with no liability to repay the money that was borrowed from the bank to pay for it. And if you got a mortgage then added someone else to the deeds afterwards, you’ve likely broken the terms of the mortgage and the bank can foreclose.

cosmic I can't remember, but I'm going to check with Land Registry tomorrow. I know we had to get the paperwork witnessed by a solicitor and it was all done at the time of the mortgage being taken out. We had a mortgage advisor and as first time buyers, followed all the advice to the letter. It was something to ensure that I had an interest in the property if anything happened, but that's all I remember.

Gretchen, I just wanted to say I remember you from a previous thread and am thinking of you. I have a feeling we may work in the same, or related organisation. If so, don't forget the employee helpline or benevolent organisation.

Gretchen, you can get the deeds iirc from Land registry and it's about £3.

eservices.landregistry.gov.uk/eservices/FindAProperty/view/QDSearch.do and you can download it. go for title search and i will tell you who owns it.

Sorry, tick the title register box.

Its possible that rather than being named on the deeds as joint owner ( as joint owners normally also have to be a party to the mortgage) you may have signed a form of consent and postponement which means that the bank has noted you would be living there and that you would postpone your interest in the house ( as his spouse ) in favour of the bank. Basically so that they could repossess the house if he didnt pay....now ..that wouldnt necessarily be a worry as the bank is not an owner of the property ..they have a charge over the deeds and are only entitled to the 20k capital and whatever interest in outstanding..the rest of the equity will belong to his estate. they could seek repossession but that would have to go through court would take ages costing them legal fees and could give poor media attention..they are much more likely to be open to either you taking out a new mortgage to replace his or to accepting settlement from the pension. Talk to the beareavement team at earliest opportunity and offer to continue making payments until pension is sorted..thinking of you x

I work in mortgages. To be honest I wouldn’t worry about being added to the mortgage. The most important thing is to get the will sorted, and that he leaves the house to you, also check you are the named beneficiary for his pension/ other payments.

After the death of your DH (I’m so sorry about him, I’m trying to find a nice way to write it, and struggling, so I’m keeping with factual, hope that is OK), tell the lender what has happened, tell them that you are expecting payments to pay off the balance of the mortgage and they should give you the space and time to wait for them. If they start getting difficult keep using the word “vulnerable” this should trigger them to start taking extra care.

This will not impact your credit rating if you are not on the mortgage, as you are not the one liable for payments. So long as you tell the lender you have monies due to pay off the balance you will be fine. If they start being difficult I’m very happy for you to DM me and I can give more specific advice.

Again, very, very sorry for what you are going through

If you have house insurance there may be the option on there to access a free 30 minute legal advice telephone consultation which you could ask them about these things xx