Death of a joint owner with a mortgage

Year Published: 2010

When two or more people own a house they can do so either as joint tenants or tenants in common. If they own as joint tenants, and one of them dies, the survivors inherit the house. If they own as tenants in common, the share of the house owned by the person who died passes under the terms of their Will, if they have one, or under the intestacy rules.

If there was a mortgage on a jointly owned house this is often taken out in the joint names of the owners. Care does however need to be taken if there was an outstanding mortgage on the house which was owned as joint tenants and on death the house passes to the survivor. The mortgage debt may not pass to the survivor on the same basis.

Often there is a life policy which could pay out to cover the mortgage debt but if there is no such cover in place, the people dealing with the deceased’s estate would need to be careful before distributing the estate until the mortgage arrangements have been reviewed. The house would no longer belong to the estate but the deceased’s share of the mortgage debt would. If there is no life policy and there are insufficient cash monies in the estate to pay off the deceased’s share of the mortgage then this could cause problems.

Legal advice would need to be taken if this situation arises.

For more information please contact Helen Kelly, in our Personal Law team, on 0161 475 7685.

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