Single mortgage no protection - what happens?

eirbear1989

Looking for advice from anyone who may have dealt with this previously.

Hubby had a mortgage before we married. At the time he was unable to get mortgage protection with Ulster Banks due to a life long illness but they signed off on the mortgage all the same.

When UB left the market the mortgage transferred over to Permanent TSB / Pepper finance. We're looking to get my name on the mortgage and Permanent / Pepper finance have said we need to totally remortgage including mortgage protection in both our names. Stress tests will need to be carried out (we've 2 kids and another on the way). There has never been an issue paying the mortgage or the car loan, we have a bit of money being saved yearly too.

I've applied for mortgage protection but I know it's a long shot for him to get it. He wants to change jobs (register as a sole trader) but he can't until all this is sorted.

Anyway, my main question is, if god forbid anything was to happen to him and only his name was on the mortgage, would I be allowed to stay in the house as long as the mortgage was still being paid??

My fear is there is equity on the house of about €200k which the bank know about as it was only valued in December 2023 to reduce the interest rate. So the house is worth more to the bank to sell on than to leave me and our kids in it.

coylemj

I'm wondering who is driving this - what will Pepper Finance do if you decide to do nothing? I understand that they want you to get mortgage protection if you go through the process of adding your name to the deeds but if you decided to do nothing, is there any reason why things would not simply continue they way they are now - you continue to pay the mortgage?

If you want to get a definitive assessment of your situation if your husband remained as the sole name on the deeds and he died tomorrow, you'll probably need to talk to a solicitor. As to what you should do now, the advice you get may be to do nothing.

You need to ensure that your husband has made a will leaving 100% of the house to you. If he died intestate, your children would be entitled to a share of the house. Which could complicate things when it came to getting a new mortgage in your name.

Whether or not your name is on the deeds, you will then end up owning the house if he dies tomorrow. But, without a mortgage protection policy on his life, you will also inherit the mortgage.

So I can't see any advantage in putting your name on the deeds.

JVince

Is it PTSB or Pepper? They are totally unconnected financial companies.

They are correct that you would need to extinguish one mortgage and start a new one, but it is less onerous than being a totally new customer.

If the worst happened and your husband passed away next week, banks will do their best to facilitate a transfer and if you can show repayment capacity, there will be no issue. Its also the family home and the children come into the equation, so you can take it that there will be no possibility of the house being sold under you.

Good to be thinking of every scenario, but I would not let it worry you too much.

eirbear1989

@coylemj

Thanks for your response!
It is my husband driving this. As he is worried that if god forbid something was to happen to him he wants myself and the kids to be left in the house. We thought (as it was what the bank had originally told us) that it would be a simple transaction, but it is not playing out that way.
We have spoken to our own solicitor (mainly family law) and she was no wiser on the subject, yet she was surprised that it seemed such a difficult process. 
I will say that to him regarding the will - I know that had been his plan but the focus recently had been the mortgage so I will say it to him again. I don't mind inheriting the debt, I would just hate to loose the house if the worst was to happen! 

eirbear1989

@JVince

Thanks for your response!

Your guess is as good as mine. Originally, I went to the branch - they told me to fill out a one page form and send it to a PO Box in Shannon with all the relevant documents. Response came back about 3 months later to say I needed to go into the branch. Again, I went to branch and they said no - until I showed them the letter I had received - then they took all the details and submitted them internally. We heard nothing back personally but our solicitor got a letter with a new application form to be completed by ourselves.

This is what I was hoping - that I could keep up the repayments. He owns a number of assets I could sell that would nearly clear the outstanding debt.

It is just thinking worse case scenario here.

Jim2007

https://www.boards.ie/discussion/comment/122133777#Comment_122133777

It is not a simple thing, a mortgage is just the generic name for a group of financial products. When you get a mortgage you sign up to a very specific product with certain terms and conditions. I'm guessing here but since your husband took this out before you were married and solely in his name the bank was not too worried about the lace of cover because basically if he died they got the house so no concern about not getting paid.

What you are not proposing would completely change the nature of the agreement and make it very difficult in not impossible for them to simple acquire the house in the event of his death and thus making it a far more risky proposition from their point of view and that of their underwriter. And as you have discovered that is not going to fly, they are going to want a full assessment before they will be willing to expose themselves to such a risk.

coylemj

https://www.boards.ie/discussion/comment/122133777#Comment_122133777

Your husband has got it into his head that putting your name on the deeds will somehow secure the house for you if he dies. But you're going to end up owning the house anyway - it won't matter who's name is on the deeds and the mortgage will still be there to be paid.

Going though a process in an attempt to weaken the bank's lien on the property won't fly, the existence of the mortgage prevents you from making any unilateral moves in relation to the title of the property. Because, as you've discovered, the bank have to be involved and they're saying that it would require a new mortgage which they won't give you because of the lack of a mortgage protection policy.

You're effectively cornered here. I would advise you to convince your husband to drop the plan and do nothing.

Jim2007

https://www.boards.ie/discussion/comment/122133784#Comment_122133784

Re reading this again….

If your husband's primary concern is to ensure that you own the house outright, then why does he not use these assets you mention to achieve that?

eirbear1989

@jim2007 He's a farmer. His assets are farm related. Without them he couldn't farm (shed, tractor, cattle, sheep, trailers etc). Were

If he was to pass I'd absolutely sell them on, which should cover the full mortgage but just in case it does not.

eirbear1989

. B

eirbear1989

@coylemj

"Your husband has got it into his head that putting your name on the deeds will somehow secure the house for you if he dies"

Exactly this! If we are in no better a position by remortgaging and adding my name, then it is pointless in my mind. But he thinks it would put me in a better position.

Jim2007

https://www.boards.ie/discussion/comment/122138304#Comment_122138304

Well then there is not much to be done from a practical point of view. However if it would give him peace of mind (which is also important) he might consider two options:

• Place these assets in your name now, so that they do not form part of his estate on death and you are free to dispose of them at your discretion in order to do a deal with the bank if the need arises.
• See if the bank would accept the pledge of these "other assets" as an alternative to the house itself. Depending on the value of the property it might be an attractive alternative as it would be easier to dispose of than a family home in the event of the loan not being paid down.

I have done this kind of thing before in the past for vulnerable people, it did little from a practical point of view, but it did give the caregivers peace of mind. If you were to go down this road, then the legal and financal consequences needt to be carefully considered and I doubt your solicitor is up to it base on what you have said so far. You need someone who can do the wheeling and the dealing, knows a bit about the banking mentality and can present the case in a good light.

Ted222

Thinking it through, if your husband was to pass away, he presumably have left the house to you in his will. The lending institution is still owed X amount on the outstanding mortgage.

The lending institution taps you on the shoulder and reminds of the amount owed. You come to an agreement with them either by taking out a mortgage yourself or by selling the farm equipment and using the proceeds to clear the loan.

I think your fear of the bank seeking an immediate repossession is unfounded. It’s not in their interests to put a grieving widow and her kids onto the street, particularly when said widow is both willing and able to pay the outstanding debt by alternative means.