Inheriting property with a mortgage.

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Thirsty

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Somewhat similar question to an earlier poster.

Joe has a property valued at say 300,000 with a mortgage of 100,000; he does not have life assurance & so the mortgage will not be redeemed on his death.

Joe leaves the property to his niece Jane. The property is in a popular location, like many houses of older folk, it's a little old-fashioned decor wise & could do with some work; Jane doesn't want to sell at this time.

Jane is a student, she could keep up the mortgage payments by letting out a room & with some help from parents. When she is finished her studies in 2 years time she can fully expect to be employed and cover the mortgage amount on her own.

The question is, if the mortgage is being paid... will the banks insist on a sale?
 
I think that the bank will want their money back from the estate. So it maybe that the niece will have to get a mortgage in her own right perhaps with a parent guarantee to repay the loan. Property value at they level she may be successful. She will also have a bit of CAT to pay unless she has been living in the house 200,000 - 25,000 x 33% = 58k.
 
It looks as if she is going to need a mortgage of €158k to buy the house and pay off the CAT. Seems unlikely if she is a student.

Who is the executor? Does he have to dispose of the house immediately? Is there any other cash in the estate? Could he continue the mortgage repayments on the loan and finally distribute it after two years when Jane is working and able to get a mortgage?

Brendan
 
..continue the mortgage repayments on the loan and finally distribute it after two years..
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Thanks Brendan, that's pretty much the question I'm asking; if Jane lives in the house & rents a room out, between that & a bit of help from parents they should be able to meet the mortgage payments currently until Jane is working.

One of Jane's parents is the executor; so should be OK from that point of view.

My question was, would that work from the banks' perspective or could they insist on a sale?
 
Might be a silly question, but how would the bank know Joe is dead if probate is delayed for a couple of years. I know I sorted probate on my grandparents house a couple of years ago, and that was going back 20 years from the first death, no mortgage though obviously.
 
Normally the solicitor would tell them but as there is none here I guess they wouldn't know unless someone told them. They would be happy enough so long as the money keeps rolling in each month. What they don't know won't hurt them. ;)
 
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