What do I do if I lose a loved one who has a Keystart loan?

We understand you may have a lot to deal with when you lose a loved one. Particularly if you are responsible for the financial side of things. There is added stress when managing the complex list of tasks and it can be hard to know where to start. We’ve prepared a guide to help you manage a Keystart account in the event of the death of a homeowner.

Managing the Keystart account

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The manner in which you or someone else can deal with the loan or property of a deceased person will depend on the structure of the loan and the ownership of the property. This is a complicated area of law and you should seek independent legal and/or financial advice that takes into account your particular circumstances.

We encourage you to contact us at your earliest opportunity to discuss your intentions as we may be able to offer some assistance depending on your individual circumstances.

Please note: The information provided on this page is designed to provide you with some overview of the surrounding processes and concepts but should not be relied on as advice.

Obtain a death certificate

A funeral director will usually apply for a death certificate for you when they register a death. Keystart will request a copy of this to update the home loan account.

If the home loan is only in the deceased name, Keystart will put the home loan repayments on hold once we receive the death certificate.

If you are applying to become the Executor or Administrator of the Estate, the home loan payments will remain on hold while you apply for the necessary documents. The home loan payments will become the responsibility of the Executor/Administrator of the Estate only once they have been appointed.

If the home loan account is only in the deceased's name

1. Apply for necessary documentation

Following the death of a loved one, it will be necessary to deal with their estate.

What is an estate?

This is a term broadly used to describe the collective assets, liabilities, and debts of the deceased person.

A personal representative may be required to be appointed to the deceased’s estate, whose responsibility will be to finalise their financial affairs and to distribute their property and assets.

As an Executor / Administrator of the Estate, you will be required to obtain some legal documents. The documents vary depending on whether the deceased left a will and what is covered in the will.

Key terms to know

Probate: this is where an Executor is appointed to carry out the wishes of the deceased as set out in their will.
Letters of Administration with the Will Annexed: This involves the appointment of an Administrator in circumstances where the deceased died leaving a will that either did not appoint an Executor, or the Executor is unable or unwilling to apply for Probate.
Letters of Administration: This involves the appointment of an Administrator, in circumstances where the deceased died without leaving a valid will (if a person dies without a valid will it is called Intestate).

The Supreme Court of WA website provides very clear explanations of what is involved in the Wills, Letters of Administration and Probate application process.

2. Get access to the Keystart account

Once an Executor/Administrator has been appointed to manage the Estate, a copy of the Probate or Letters of Administration must be supplied to Keystart. At this stage, we’ll also require some identification of the Executor/Administrator, either a copy of their driver’s licence or passport.

The appointed Executor/Administrator will then be added as an authorised party to the Keystart loan. This will give them access to the loan details to assist with paying off the debt.

Any third parties that existed on the account prior to the account holder’s death will be removed.

3. Your options as Executor or Administrator of the Estate

The remainder of the home loan is required to be paid in full. If you become Executor/Administrator of the Estate, your options for paying off the loan are:

paying out the remainder of the home loan with the Estate funds,
refinancing the home loan into your name if you’re the sole beneficiary. This may be with another lender or with Keystart, or
selling the property to pay off the loan.

To help you decide which option you choose, we suggest you arrange a free market appraisal to be completed by a local real estate agent so you can determine the estimated value of the property.

Keystart can then advise you of the amount required to be paid and will help you through the process of setting up your request.

If you or a family member are living in the property and would like to be assessed by Keystart to check your eligibility for a Keystart loan to purchase the property, please get in touch. You'll need to know the estimated value of the property. We’ll conduct a financial assessment for you, taking into consideration your income and expenses, any debts you may have and your superannuation information. We will then be able to let you know your options.

We would suggest that you seek legal and/or financial advice regarding the options available to you as an Executor/Administrator.

If the home loan account is a joint account

The loan will become the responsibility of the second Keystart account holder.

A condition of Keystart loans is the property must be owner-occupied. If the remaining account holder no longer lives in the home, the property will have to be sold or the loan refinanced to another lender.

1. Lodging a survivorship application request

If the remaining Keystart account holder decides to take on the loan themselves, then we will need to remove the deceased person from the loan account. A survivorship application request can be lodged with Landgate to remove the deceased person’s name from the Certificate of Title. We need to provide a consent letter before this survivorship application can be lodged.

Please note: A survivorship application can only be made if the property is owned by the account holders as Joint Tenants. If the account holders are Tenants in Common, there will be a different process.

2. Life insurance

In some instances, a lump sum may be deposited into the account from the deceased person’s life insurance, reducing repayments to make the home loan more affordable for the remaining borrower.

To discuss any of the outlined options above, please get in touch.

If the loan account is a Shared Ownership Home Loan

If the loan is a Shared Ownership Home Loan and the Housing Authority remains registered as a co-owner of the property. A Co-Owners Deed would have been established between the Housing Authority and the account holder. The deed includes the steps that must be followed in the event of the death of the account holder.

If you are a joint account holder

You should have access to the Co-Owners Deed. If you require a copy, please contact us.

If you are an Executor or Administrator

We can provide you with a copy of the Co-Owners Deed upon production of the relevant grant from the Supreme Court confirming your appointment. Please contact us if you would like help understanding the Co-Owners Deed.

Find out more about selling or refinancing a Shared Ownership Home Loan.

Ongoing costs

If the loan is a joint account and you are the second account holder, or if you have been appointed as an Executor/Administrator of the Estate, you are required to continue the loan repayments.

You'll also need to be aware of any shire and water rates or strata levies.

It’s important to maintain building insurance for the property while you are considering what next steps to take with the home. This is to ensure that the home is covered if any damage is done to it.

Get in touch

We understand that this is a difficult time, please know we are here to help. We strongly encourage any person impacted by the death of a loved one who holds a home loan with Keystart to communicate with us promptly and regularly to discuss your options.

If you have any questions about this process and your options, get in touch.

Take care of yourself

If you are struggling during this difficult time, you may also find it helpful to reach out to support services.

Relationships Australia – 1300 364 277
Australian Centre for Grief and Bereavement – 1800 642 066
Lifeline – 13 11 14
Beyond Blue – 1300 22 46 36

HELPFUL RESOURCES