Advice on house whos grandmother passed away

KegglesMcS · 26-02-2013 3:49am #1

Hi all,

I bought a house with my grandmother a number of years ago. She has passed away now. What happens now with the remainder of the house, do I take on the remainder of the mortgage? The house price has dropped at least 50% of what we payed for it.

As I dont live in it, am I subject to any other payments?

Any help greatly appreciated.

Westsbest · 26-02-2013 3:53am

Has she made a will?

KegglesMcS · 26-02-2013 4:18am

No

Westsbest · 26-02-2013 4:40am

If she died intestate Her estate would go to nearest relative that may be you?if not it could get tricky contact FLAC for free advice...hope it works out.

KegglesMcS · 26-02-2013 5:59am

But what estate does she own? Half of a house with a mortgage twice its value?

StillWaters · 26-02-2013 7:27am

KegglesMcS wrote: »

But what estate does she own? Half of a house with a mortgage twice its value?

We dont know. She may have savings and life insurance. Had she mortgage protection on the house?

If not, this could get complicated depending on if you were joint tenants or tenants in common, and if there are other relatives in the mix.

KegglesMcS · 26-02-2013 7:32am

Not sure about savings but I doubt she had life insurance. In fact I think we agree when purchasing the house she couldnt have it and I would bear that cost

StillWaters · 26-02-2013 7:37am

KegglesMcS wrote: »

Not sure about savings but I doubt she had life insurance. In fact I think we agree when purchasing the house she couldnt have it and I would bear that cost

What do you mean you woukd bear the cost? did you take out a joint life policy and pay the premiums? it would be very unusual for the bank to allow the mortgage without both lives being insured.

KegglesMcS · 26-02-2013 7:43am

You think thats unusual. My grandmother was in her 80s when we purchased the house. I figured they wouldnt insure her. I could be wrong of course.

StillWaters · 26-02-2013 7:50am

KegglesMcS wrote: »

You think thats unusual. My grandmother was in her 80s when we purchased the house. I figured they wouldnt insure her. I could be wrong of course.

You need to look over your documents. It would be shocking if a bank gave a joint mortgage to an 80 year old without insisting on mortgage protection. Mind you the protection would be astronomical. Are you sure it was a joint mortgage?

KegglesMcS · 26-02-2013 7:52am

Absolutely. We bought the house in joint names, both our names are on mortgage.

D3PO · 26-02-2013 8:53am

OP this just doesnt add up at all. No way did the bank lend your a joint mortgage with an 80 year old without demanding they had life assurance.

And no way would it have been financially viable to insure an 80 year old. Look over your paperwork becasue I can tell you now for a fact what you think the situation is and what the situation actually is are two very different things.

tony81 · 26-02-2013 11:12am

D3PO wrote: »

OP this just doesnt add up at all. No way did the bank lend your a joint mortgage with an 80 year old without demanding they had life assurance.

Not strictly correct. Where a person cannot get life assurance it was common for banks to ask the applicants to sign a waiver.

The bank probably would have given the op a mortgage on the strength of employment income, pay increments expected, pension, and rent a room, and the fact interest rates were low and property prices were rising year on year... bullsh!t calculations really.

Op, had your gran any savings or other property? They now form part of her estate, plus her half of the house less her half of the outstanding mortgage. So a lot will depend on her will, and if no will, succession rights of her children/extended family. My understanding anyway... Best get in contact with your solicitor.

If your gran had nothing at all except for the house, i reckon you'll be liable for the entire mortgage but should also own the house too.

roro2 · 26-02-2013 11:18am

tony81 wrote: »

Not strictly correct. Where a person cannot get life assurance it was common for banks to ask the applicants to sign a waiver.

The bank probably would have given the op a mortgage on the strength of employment income, pay increments expected, pension, and rent a room, and the fact interest rates were low and property prices were rising year on year... bullsh!t calculations really.

Op, had your gran any savings or other property? They now form part of her estate, plus her half of the house less her half of the outstanding mortgage. So a lot will depend on her will, and if no will, succession rights of her children/extended family. My understanding anyway... Best get in contact with your solicitor.

Waivers were commonplace a few years ago. I think once an applicant is over 50 there is no legal requirement for a bank to insist on life cover - whatever about the merits of this from a lending perspective. In this case it sounds like the bank would have based their lending decision solely on the op's repayment ability.

D3PO · 26-02-2013 11:22am

tony81 wrote: »

Not strictly correct. Where a person cannot get life assurance it was common for banks to ask the applicants to sign a waiver.

The bank probably would have given the op a mortgage on the strength of employment income, pay increments expected, pension, and rent a room, and the fact interest rates were low and property prices were rising year on year... bullsh!t calculations really.

Op, had your gran any savings or other property? They now form part of her estate, plus her half of the house less her half of the outstanding mortgage. So a lot will depend on her will, and if no will, succession rights of her children/extended family. My understanding anyway... Best get in contact with your solicitor.

the OP hasnt mentioned signing a waiver, nor does in the context of two people buying it make sense to as if the OP qualified on his / her own salary why would they be asking their 80 year old grandmorther to go in on the mortgage with them.

there are far too many holes in this for the OP's version of events to be accurate. To believe an 80 year old purchased half a property with no life assurance and no will just cannot be right.

That would be incredibly irresponsible, and to believe that would then be compounded by there not being a detailed discussion about what would happen when she passed away just has no credibility at all.

The obvious assumption given such a conversation clearly never took place is that the situation isnt as descriped by the OP in their opening post. Either theres an estate more than capable of clearing the grandmothers portion of the mortgage, there is a life assurance policy or something else.

26-02-2013 11:32am

I think you need to get legal advice to look over any inheritance issues and any documents relating to the purchase of the house.

Marcusm · 26-02-2013 11:32am

KegglesMcS wrote: »

Absolutely. We bought the house in joint names, both our names are on mortgage.

You need to go back tot h solicitor who handled the purchase; they will be able to advise as to whether the purchase was effected as joint tenants or tenants in common. THis will in part assist in deciding whether it is yours automatically or whether the rules of intestacy may apply. IN either case, I suspect you are fully liable for the mortgage.

KegglesMcS · 26-02-2013 12:09pm

D3PO wrote: »

OP this just doesnt add up at all. No way did the bank lend your a joint mortgage with an 80 year old without demanding they had life assurance.

And no way would it have been financially viable to insure an 80 year old. Look over your paperwork becasue I can tell you now for a fact what you think the situation is and what the situation actually is are two very different things.

Nonsense all of it.

KegglesMcS · 26-02-2013 12:14pm

Marcusm wrote: »

You need to go back tot h solicitor who handled the purchase; they will be able to advise as to whether the purchase was effected as joint tenants or tenants in common. THis will in part assist in deciding whether it is yours automatically or whether the rules of intestacy may apply. IN either case, I suspect you are fully liable for the mortgage.

Yes good advice, I'll contact the solicitor and see what was agreed. I guess I did sign a waiver, it was many years ago right after I had left university. I bought it from the council and part of the conditions was my grandmother had to have her name on the mortgage in the event I left her homeless for whatever reason.

Stheno · 26-02-2013 12:20pm

KegglesMcS wrote: »

Yes good advice, I'll contact the solicitor and see what was agreed. I guess I did sign a waiver, it was many years ago right after I had left university. I bought it from the council and part of the conditions was my grandmother had to have her name on the mortgage in the event I left her homeless for whatever reason.

How long ago did you buy it?

StillWaters · 26-02-2013 1:04pm

Are you absolutely sure your gran was on the mortgage, and not just on the deeds?

In any case, you probably have full liability for the mortgage now, and probably have ownership, depending on what sort of agreement was in place. The original solicitor will advise you on this.

You won't have to pay capital gains tax or inheritance tax as obviously there is no capital gain, rather a liability.

Someone will have to do probate, you can get a solicitor to do it, but you can do it yourself if you wish if you are the nearest relative, or have the agreement of the nearest relative.

Henry Ford III · 26-02-2013 3:02pm

Seems that the OP's Granny died intestate, and therefore half of the house is owned by her estate, together with half the mortgage.

Whether or not the estate has an excess of assets over liabilities depends on whatever other assets and liabilities exist. They must identified.

Legal advice is needed I reckon.

Marcusm · 26-02-2013 3:13pm

Henry Ford III wrote: »

Seems that the OP's Granny died intestate, and therefore half of the house is owned by her estate, together with half the mortgage.

Not necessarily, joint tenants would imply a right of survivorship meaning that the 50% would not become part of a deceased's estate (whether intestate or not). That's why I suggested going back to the original solicitor who should have access to the underlying documents. The existence of a mortgage in respect of which they solicitor will have acted on behalf of the lender means that the file should remain open/available.

seamus · 26-02-2013 3:17pm

Henry Ford III wrote: »

Seems that the OP's Granny died intestate, and therefore half of the house is owned by her estate, together with half the mortgage.

Not necessarily.

Since the intention was to purchase the home and safeguard the grandmother's place in it, then most likely the arrangement was joint tenants with both names on the mortgage, but the OP only had life assurance. In the event of the OP's death, the mortgage would clear and the entire property passes to the grandmother. In the event of the grandmother's death, the property and the mortgage pass to the OP.

Assuming the OP has/had the means to service the mortgage themselves, a bank would go with this arrangement.

But yes, you will need to go back through your paperwork, most likely with a solicitor, to unravel this.

D3PO · 26-02-2013 3:29pm

KegglesMcS wrote: »

Nonsense all of it.

I never said it was nonsense. I said what you believe to be the facts of the matter and what are actually the facts are going to be dissimilar. Like I have already said you need to check the mortgage paperwork and like others have said you need to discuss with a solicitor.

Advice on house whos grandmother passed away

Comments