Can a mortgage company charge interest after the account holder has died?
My late father remortgaged his house to pay off debts. he
k the mortgage over 25 years at the age of 76! - for the life of the mortgage he would not
have even made a dent in the capital owed. now as executor of his estate, i find out the mortgage company have the deeds, so how can i sell his property to pay off the debt. they still want to charge interest even though i have informed them of his death. are they within their rights to do this?
Answer
They are
still within their rights to chage interest and unfortunately do.
mortgage companies can lend into retirement age. some also offer retirement mortgage products whereby they will only collect the interest on a monthly basis, not capital. this is done on the assumption that the mortgage will be repaid from the proceeds of the estate, basically the mortgage co will take the funds owed from the eventual sale. saying this though the company still have to carry out the usual underwriting checks on the applicant, which obviously includes affordability etc.
