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Frank C.
Frank C.
Campbelltown, NSW

What happens when one party in a joint home loan dies. Is the estate of the deceased liable or does the loan transfer to the living party.

last year


If you are the surviving joint owner of a property, then go and see your solicitor.
If the two owners were "joint tenants", the title will be transferred to the survivor.
If the owners were "tenants in common", transfer of title to the survivor is not assured, but is determined by the will of the deceased.
I am sorry for your loss.

There is not a simple answer to your question Frank.
I will suppose that the granting of the loan in the first place is to be based on two incomes.
Upon the death of one party, the lender would need to know that the survivor could afford to continue making the loan repayments. If they are assessed as being able to manage the loan, then the bank would transfer title to the survivor. If they could not afford the loan repayments, it would be prudent to sell the property in order to repay the lender.
For that reason, I always recommend that the borrowers each have adequate life insurance to pay out the debt should one of them die.
If family members jointly purchase property I also recommend that they have a written agreement in place as to what they will do in the event that certain circumstances occur. This eliminates arguments in the future caused by misunderstandings.
Hope this gives you some more clarity.
Appreciate that I have not touched on any potential tax issues, which are dependent on whether the home is owner occupied or used for investment. That is potentially another can of worms.

Hi Frank,

Always see a solicitor / lawyer for legal clarification and check with your bank. The loan (some or all) would most likely be required to be refinanced if their is insufficient funds from other proceeds. The advantage of refinancing is the loan can be extended potentially back out to 30 years which may ease servicing. If you do need to refinance see a broker who will provide you with a greater option of lenders that might be better suited.

Peter Pakarinen
Aussie Ramsgate

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