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Post by nyxish on Jul 1, 2015 2:09:10 GMT
Ok, so if someone has a house and they are still paying the mortgage, and then that person passes away... that house belongs to the bank, right? The house can't be left to anyone in the will...or it can't be left in a will that a specified person can take over said mortgage unless it was a right of survivorship already written into the document or something, is that correct?
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Post by Merge on Jul 1, 2015 2:11:03 GMT
It will vary from state to state. My parents had taken a line of credit against their house shortly before they died (basically a second mortgage) and while they left the house to me and my siblings, we either had to continue to pay the LOC or sell the house and pay it off. What they really left us was the equity in the house.
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Post by cadoodlebug on Jul 1, 2015 2:17:58 GMT
Ok, so if someone has a house and they are still paying the mortgage, and then that person passes away... that house belongs to the bank, right? The house can't be left to anyone in the will...or it can't be left in a will that a specified person can take over said mortgage unless it was a right of survivorship already written into the document or something, is that correct? It would be part of their estate and left to the heirs unless it was bequeathed to someone in their will, trust, etc. The bank would have no clue who the successor owner would be. Either someone could move in, continue the payments or it could be sold. If it's underwater, then the bank could take it. |
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teddyw
Drama Llama
Posts: 6,850 
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Post by teddyw on Jul 1, 2015 2:18:21 GMT
I think some people have insurance to pay it off if they pass away.
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Post by Basket1lady on Jul 1, 2015 2:27:55 GMT
I think some people have insurance to pay it off if they pass away. My parents had this. My mother died 3 days after I graduated from college. My parents's school loans were forgiven, along with mom's car and the house. They had intended for it to be if Dad died, as us kids were still dependent on them and Mom's salary wouldn't have covered all the debt. Dad did a lot of traveling those first few years. |
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Post by elaine on Jul 1, 2015 2:32:29 GMT
This is one of things to probably talk to a lawyer about if it involves you or your spouse and either of your parents. They will know your state's laws.
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Post by *leslie* on Jul 1, 2015 4:20:23 GMT
The house does not go automatically to the bank. The house belongs to the person the original owner stated in their will. As long as that person keeps making the payments, the bank doesn't care. We have houses in escrow all the time that are being sold by the people that inherited the properties. How do think children inherit their parent's home?
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Deleted
Posts: 0
May 18, 2024 13:29:09 GMT
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Post by Deleted on Jul 1, 2015 4:27:40 GMT
It depends on who inherits. Generally, if you are not a close family member, you cannot assume the loan and the bank can force you to pay off the loan. Most often, that's going to mean you need to either sell the house or refinance the loan. Close family members usually can assume the mortgage, but need to contact the lender, provide a death certificate, etc..
As others have said, though, things can vary from state to state.
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Post by smokeynspike on Jul 1, 2015 5:29:23 GMT
As others have said, the bank does not take back the house after someone dies. It would still be inherited by someone, in most cases. They will continue to pay on the loan or sell the home, etc.
Melissa
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Post by elaine on Jul 1, 2015 15:18:49 GMT
Another thing to find out is if the homeowner had a regular mortgage or a reverse mortgage - if it were a reverse mortgage, that would be something completely different.
Again, talk to a lawyer if it involves you or your spouse.
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MerryMom
Pearl Clutcher
Posts: 2,539
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Post by MerryMom on Jul 1, 2015 15:24:02 GMT
The deed on the house (owner) and the mortgage are two different things, the house may be inherited by someone, BUT the mortgage is a lien against the property. Someone has to pay the mortgage.
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keithurbanlovinpea
Pearl Clutcher
Flowing with the go...
Posts: 4,271
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Post by keithurbanlovinpea on Jul 1, 2015 15:33:34 GMT
It depends on who inherits. Generally, if you are not a close family member, you cannot assume the loan and the bank can force you to pay off the loan. Most often, that's going to mean you need to either sell the house or refinance the loan. Close family members usually can assume the mortgage, but need to contact the lender, provide a death certificate, etc.. As others have said, though, things can vary from state to state. It would also depend on the loan type and the documents. Not all loans are assumable, no matter who inherits the house. First step is to notify the mortgage company that one or more borrowers has passed and provide the mortgage company with a copy of the death certificate. They will update their records to show the borrower as deceased. As soon as the will is probated (or there has been some decisioning on executor/estate handling by the court if the decedent passed intestate) then provide that to the mortgage company as well. Then they can update phone numbers, addresses, etc. Once the court approves the disposition of the property, then the next steps can be taken (assumption, refinance, sale, etc.) |
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back to *pea*ality
Pearl Clutcher
Not my circus, not my monkeys ~refugee pea #59
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Jun 25, 2014 19:51:11 GMT
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Post by back to *pea*ality on Jul 1, 2015 15:44:08 GMT
Based on my working for a real estate attorney in his title company the ownership of the property is dictated by how the property is held in title or on the deed and then the will. If a person dies and leave the property with a mortgage on it to another person via their will, the mortgage obligation and any other liens still run with the property.
The heir of the property can contact the mortgage company to see if they are willing to modify the mortgage allowing them to take it over. Otherwise, they would have to refinance the mortgage if they want to live in the home or they can sell the home and pay off the mortgage and take the net proceeds from the sale.
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Nanner
Drama Llama
Posts: 5,969
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Post by Nanner on Jul 1, 2015 16:03:55 GMT
We have insurance on our mortgage.
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Post by sues on Jul 1, 2015 16:09:20 GMT
My Dad had a mortgage when he died. We paid the bill from his accounts until it was sold the following year. The proceeds from the sale ended up divided between the kids. The bank didn't enter into it at all- well, not until we paid the mortgage off.
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Post by nyxish on Jul 1, 2015 20:28:51 GMT
Interesting, thank you.
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