Finances might be the last thing you want to think about in the aftermath of any sort of bereavement. But if someone you’re financially dependant upon, or someone you share a lot of financial ties with dies, then handling the money side of things is a really important thing you’ll have to deal with.
So today we’re talking about what happens to your mortgage payments if your spouse dies. Now, it’s easy to bury your head in the sand and think this is something that won’t happen to you. But according to bereavement statistics from 2023, more than 1 in 20 people of all adult ages has suffered the death of a spouse. If we look only to the over 55s, this figure is unsurprisingly much higher, at 9.46%.
So the death of a spouse isn’t as rare, even in younger people, than we might hope.
If your spouse dies and the mortgage was taken out jointly between you, then you as the surviving debtor, become responsible for the mortgage repayments.
If you’re in a position to simply continue making those, then financially, this might not be too much of an inconvenience.
You’ll need to notify your lender of the situation and a copy of the death certificate may be requested. But ultimately, the property (and the debt associated with it) are now something you’re jointly responsible for.
What happens if your spouse was the main earner?
If your spouse was the primary earner in a household and their death leaves you unable to make the repayments on your own income, you have some considerations.
- Did the spouse have a life insurance policy? If so, and this policy is sufficient to cover the mortgage repayments you could either repay in full or continue to make your payments from the insurance payout
- Is your situation temporary? For example, if you’re likely to be starting a new job in the coming months, perhaps speak to your lender and see if they can offer some short term solution to help
- Remortgage the home: If you have a lot of equity in your home, you may be able to remortgage it and get a new mortgage that is more affordable for you
- Sell the home: If you simply can’t afford the mortgage repayments and you are unlikely to be able to do so, then an option is to sell the house and pay off the outstanding debt with the sum raised from the sale
The Steps you Should Take
Whenever you have a property with a spouse or other financial commitments, it’s a sensible option to consider whether you should have life insurance policies in place that would ensure that, in the event of one of you dying, the surviving spouse isn’t left in financial jeopardy.
However, should you find yourself in the position now where your spouse is deceased and you don’t have life insurance policies, your immediate steps should be:
- Assess your financial situation first and foremost, including ascertaining whether or not any life insurance payment is likely
- Contact the mortgage provider and notify them of the death of your spouse
From there, you’re in a position to determine whether you can continue to repay the mortgage, whether you want to remain in the home and what your next steps might be.