Mortgage Advice

[Chuckie]

I recently lost a family member who had a mortgage with Bank Of Scotland.

What will happen with the mortgage, and the outstanding debt on it?

The bank are saying he had no insurance, but I was under the impression that insurance was mandatory when being given a mortgage. We cannot find any paperwork to tell us whether there was insurance or not.

[Hibs Class]

One thing you could do right now is look at bank statements to see if there are any direct debits going out to insurance companies. If so you could then trace policies through the ref no.

[Danderhall Hibs]

I recently lost a family member who had a mortgage with Bank Of Scotland.

What will happen with the mortgage, and the outstanding debt on it?

The bank are saying he had no insurance, but I was under the impression that insurance was mandatory when being given a mortgage. We cannot find any paperwork to tell us whether there was insurance or not.

Was it an endowment or a repayment mortgage? If an endowment then there should be a policy which will have life cover attached.

With a repayment mortgage the individual is expected to take out a life assurance policy to cover the mortgage.

I'd imagine that the Estate of the deceased would be liable for the outstanding mortgage. Or the Bank could take the house and sell it to cover the balance.

[Woody1985]

Was it an endowment or a repayment mortgage? If an endowment then there should be a policy which will have life cover attached.

With a repayment mortgage the individual is expected to take out a life assurance policy to cover the mortgage.

I'd imagine that the Estate of the deceased would be liable for the outstanding mortgage. Or the Bank could take the house and sell it to cover the balance.

Don't let this alarm you as I'm not 100% certain...

If the house sale didn't cover the full value of the property would the remaining amount not be recoverable from other assets?

[Danderhall Hibs]

One thing you could do right now is look at bank statements to see if there are any direct debits going out to insurance companies. If so you could then trace policies through the ref no.

There's also a thing called the Unclaimed Assets Register - they may be able to help. I think they charge £25 per search but their success rate is about 1/10.

May be worth a search though just in case there is a policy or 2 out there. :dunno:

[ancient hibee]

In the last few years the banks stopped insisting on insurace policies even when they were interest only mortgages because "the sale of the house would comfortably clear the debt"!

[Gus]

Banks will openly promote/encourage people to get life insurance when taking up a mortgage, but in most cases (first time buyers especially) these plans get cancelled as:

1: The cost (although its roughly £20 a month)
2: They dont think its relevant.

Like Danderhall Hibs said you could try going over bank statements.........

Good Luck lad