If you have recently inherited a property in the UK, it's important to understand that you are now responsible for any outstanding mortgage repayments. Regardless of whether you plan to live in the property or not, the responsibility to pay off the mortgage now rests on your shoulders.

In some cases, the deceased may have taken out a life insurance policy that can be used to cover the cost of the outstanding mortgage. However, if this is not the case, or the insurance payout is not sufficient to cover the full amount of the mortgage, there are generally two options available to you once the property has been officially transferred to your ownership following probate:

1. Sell the property and use the proceeds to pay off any remaining mortgage

2. Take out a new mortgage in your name to take over responsibility for the repayments

Joint ownership

If the inherited property is owned jointly with other beneficiaries, then each person will own an equal share unless otherwise stated in the will. As such, all beneficiaries must work together to decide the best course of action for the property. There are two types of joint ownership recognized in UK law:

1. Joint Tenants - This enables everyone to have equal rights to the property, and the ownership is split equally between the beneficiaries. In the event that one person dies, the property will stay with the surviving owners. The last surviving owner will then be able to pass on the property to the beneficiary of their choice.

2. Tenants in Common - This type of joint ownership means that each individual has a percentage share of the property. However, the percentage does not have to be equal, and beneficiaries can choose to pass on their share to someone else if they wish.

In some cases, selling the inherited property may be the most straightforward option. Once the property is sold, the proceeds can then be divided among the beneficiaries.

For more information on joint ownership visit our page here

Outstanding mortgage

If the inherited property still has an outstanding mortgage to pay off, you'll need to ensure that the mortgage is in your name. This can be done by either transferring the mortgage to you with the same lender or setting up a new mortgage agreement.

In either case, you'll need to pass the usual affordability and credit checks. If the property is owned outright, you can move in straight away and start enjoying your new home.

Selling the property

Selling an inherited property can be a daunting task, especially if the property is in a different location or requires significant updates. To get started, clear the property of any items and decide whether to sell, donate, store, or dispose of them. If the property was owned by elderly relatives, it's worth considering refreshing the decor and carpets to make it more attractive to potential buyers.

Consult with local estate agents to get an idea of the property's current value and the potential returns on any renovations or improvements. As with any property sale, you may be liable to pay inheritance tax or capital gains tax on the proceeds. The estate agent will advertise the property on Rightmove to gain interest and viewings will be arranged and booked in like with any house sale.

If you're the beneficiary of a trust that includes property, then it's the trustee's responsibility to manage the property according to the wishes of the deceased, while you are the legal owner of the property. Make sure you understand all the stipulations of the trust to avoid any misunderstandings or disputes in the future.

If you have inherited a property and need a mortgage, contact us today at 0151 662 0188 or email [email protected].