what happens if one person dies on a joint mortgage?

April 17, 2024

54
If one person dies on a joint mortgage, the responsibility for the mortgage typically passes entirely to the remaining joint owner. This means the remaining party remains responsible for continuing the mortgage payments under the existing terms.

Joint Tenants vs. Tenants in Common:

It’s important to understand the nature of joint ownership. If the owners are “joint tenants,” the remaining owner automatically inherits the deceased’s share, often through a process called ‘right of survivorship’. If the owners are “tenants in common,” the deceased’s share of the property does not automatically pass to the remaining owner but is instead handled according to the deceased’s will or the rules of intestacy if there is no will.

Continuation of Payments: 

Regardless of the type of joint ownership, the mortgage still needs to be paid. The remaining owner will need to continue making payments to avoid any risk of default.

Insurance and Protection: 

Many joint mortgage agreements include life insurance or mortgage protection insurance, which can pay off the remaining mortgage in the event of one owner’s death, depending on the policy details.

Legal and Financial Advice: 

It’s advisable for the remaining owner to seek legal and financial advice promptly. There may be a need to adjust the mortgage terms based on the new circumstances. Additionally, if the property was owned as tenants in common, the interest of the deceased will be managed according to their will, which might involve transferring ownership to another party, potentially affecting the mortgage.

Conclusion:

The death of a co-owner of a joint mortgage does not affect the lender’s right to payments. The remaining owner must continue to make payments to prevent default. Understanding the type of joint ownership and having appropriate insurance in place can significantly manage the financial impact of such an event. Consulting with a financial advisor and a solicitor can provide guidance tailored to the specific situation.

Answered by:

Alison Gibson

Ascot Mortgage Expert

Last Updated:

17.04.2024

Answered by:

Alison Gibson

Ascot Mortgage Expert

Last Updated:

17.04.2024

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