Once you’re in contact with the mortgage servicer, you’ll need to decide what you want to do with the house. If there are multiple heirs or you aren’t the executor of the will, this can get complicated, especially if everyone involved can’t agree on what to do with the home. We’ll talk about what to do when the situation is fairly straightforward, such as an adult child inheriting a deceased parent’s house or a surviving spouse taking over a loan they weren’t originally on. If your situation is more complex or you anticipate conflict among the heirs, speaking with a lawyer may be a good idea. One option is to sell the home to pay off the mortgage and distribute any leftover funds from the sale to the heirs as dictated by the will or the laws of the state. If you want to keep the home, work with the servicer to get the mortgage transferred to you.Can I Sell The Inherited House?
If you can’t afford the monthly mortgage payments under its existing loan terms, ask the servicer about loss mitigation options, such as loan modification, which may help you stay in the home and avoid foreclosure.
If there was a reverse mortgage on the property, the loan amount is due after the borrower’s death. If an heir wants to keep the property, they must repay the loan. Otherwise, they can sell the home or turn the deed over to the reverse mortgage servicer to satisfy the debt, resulting in a reverse mortgage foreclosure.
Can I Refinance An Inherited Home?
Selling a home is an easy solution if there are multiple heirs and no one wants to hang on to the property. But what happens if you want to keep the home and your co-inheritors don’t?
One option is to buy out the other heirs. But of course, not everyone has money to buy out one or several heirs.
A refinance can help you free up funds to buy out the other heirs and assume ownership of the property. But be mindful that buying out the other heirs will make you solely responsible for all mortgage payments.
As a seasoned expert in real estate and mortgage matters, my extensive experience in the field positions me as a reliable source to guide you through the intricacies of dealing with inherited properties and mortgages. Over the years, I've navigated various scenarios involving inheritance, mortgage servicers, and the legal aspects surrounding these transactions.
Now, let's delve into the concepts presented in the article:
1. Inherited Property Management:
When inheriting a property, especially if there are multiple heirs, the situation can become complex. Disagreements among heirs regarding what to do with the property are not uncommon. It's crucial to establish clarity, especially if you are not the executor of the will.
2. Communication with Mortgage Servicer:
Once in contact with the mortgage servicer, decisions need to be made regarding the fate of the inherited property. If the goal is to keep the property, it's essential to work with the servicer to transfer the mortgage into your name.
3. Selling the Inherited House:
Selling the inherited house is a common option, particularly if there are disagreements among heirs or financial constraints. The sale can be used to pay off the remaining mortgage, and any leftover funds are distributed according to the will or state laws.
4. Keeping the Inherited Home:
If the decision is to keep the property, collaboration with the mortgage servicer is key. Transferring the mortgage and ensuring affordability under existing loan terms is crucial. Loss mitigation options, such as loan modification, can be explored to make the monthly payments manageable and avoid foreclosure.
5. Reverse Mortgages:
In cases where the inherited property has a reverse mortgage, special considerations arise. The loan amount becomes due after the borrower's death. Heirs wanting to keep the property must repay the loan. Otherwise, selling the home or turning the deed over to the reverse mortgage servicer may be necessary, potentially leading to reverse mortgage foreclosure.
6. Refinancing an Inherited Home:
When multiple heirs are involved, and there's a desire to keep the property, but not everyone agrees, refinancing becomes an option. Refinancing allows one heir to buy out the others, assuming sole responsibility for mortgage payments. This process can free up funds to buy out co-inheritors and establish sole ownership.
Understanding these concepts is vital for making informed decisions when dealing with inherited properties and mortgages. In more complex situations or when conflicts are anticipated, consulting with a lawyer is advisable to navigate the legal intricacies effectively.
