 You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
Back in October Mrs RRR and I bought our first house. However, due to my having an erroneous default on my credit file at the time (since removed, thanks British Gas), I was unable to be named on the mortgage.
As such the mortgage is solely in Mrs RRR's name. We both have life insurance so that if god forbid something horrible happened we could clear the mortgage. However, if something happened to the wife as far as I understand her bank wouldn't necessarily have to sell the house to me.
Can anyone clarify what my position is and what if anything could be done before the wife can remortgage in 18 months?
Ta
If Mrs RRR's life insurance paid the bank, then the house wouldn't be theirs to sell. It would go to whoever was named in the will I assume, (or you as next of kin if you are properly married and don't have one)
If your wife died and the mortgage was paid off then surely the bank don't have any say any more?
The bank don't own the house, they just use it as security against the money they have lent you.
The best thing you and your wife can do (or anyone for that matter), is go and see a solicitor and make wills. Its not as costly or difficult as most people think.
Well the thing is that our life insurances don't automatically pay off the mortgage, more that they're cash payments. As such if something happened to the wife I'd have to wave money at her bank somehow?
Technically, I'm sure the bank would only care if you couldn't keep up payments. Obviously the sensible thing would be to pay off the mortgage with any life insurance but you don't have to.
As the muffin man says, spend a couple of quid now and get a will sorted.
Well the thing is that our life insurances don't automatically pay off the mortgage,
This can be solved, the mortgage company can be made the beneficiary. Have a word with your life insurance people or solicitor to have it noted on a will.
Re your life insurance - is it just for the value of the mortgage? If so consider taking out another policy for a lot more - we were advised to do 10x our salaries, this way you can afford to live as well not just pay the mortgage off. ie. could you afford to run your house on 1 salary even if the mortgage was paid off?
If you are both fit and well it doesn't cost much.
Well I think my insurance is set for 8* my salary and a bit less for the wife. It's through my work and doesn't cost much so you're probably right in that i should bump it up a bit.
Does anyone know how remortgaging would work when it's time? Obviously the wife will be remortgaging but is it simple to add me to it?
When MrAdamW and I got a house together I actually bought it as he was selling his. Once his was gone we went back to the solicitors and had things rejigged so that we were joint owners on the mortgage, and hence now are joint owners now mortgage has been paid off. At the time there wasn't civil partnership and if I had died he could have been thrown out of his house.
I'm quite surprised the bank granted a mortgage to your wife only if the house in joint names or is in fact the wife the sole owner of the house ? There are two methods for owner the house tenants in common / a.n. other - in one method the house passes directly to the other and you cannot vary that in a will. It's worth checking, it's particularly relevant should you divorce.
The house, mortage, deeds etc are all in Mrs RRR's name.
It's incredibly frustrating as now there's nothing stopping me being on a mortgage application I just don't know how we go about changing it? Presumably we can only be on a joint mortgage when she remortgaged?
If you sort out the will side of things and check the life insurance bits is there any reason why you need to be on the paperwork? Changing anything contractual like that tends to cost money so just get your other stuff sorted and wait until the remortgage. Unless one of you is entertaining the milkman/secretary etc. in which case get it sorted quick
The property would be part of your wife's estate. It would pass to you. The bank might require you to settle the mortgage at that stage, which you could do entirely with the cash sum from the life insurance.
Even if there were a delay in the release of the cash sum, repossession costs lots and lenders are reluctant to do it if there is any kind of alternative.
Should anything happen anyway the bank are likely to put a freeze on the mortgage account for a couple of momths or so. Or at least, that's what happened when my brother died & his wife was waiting for the insurance payout to clear it as he was the named person on all the paperwork.
i read title as montage 😳
🙂