Inheritance mortgage: how to reissue a loan from deceased relatives and save a house

A mortgage is a fairly long-term loan. Sometimes it happens that the borrower dies before the final payment. What should children or relatives do in this case and is it possible to renew the mortgage on yourself in order to live in peace in the house, the publication said. Fox Business.

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Fortunately, federal law provides heir protection when a deceased loved one's home is in a mortgage. You can get a mortgage on your relative's house if you meet certain requirements.

What happens to a mortgage when a borrower dies

Mortgages usually cannot be transferred from one person to another. The borrower is responsible for paying off the mortgage until he sells the property. The new owner then has to secure the funding themselves.

But federal law allows for the death of the principal borrower. In this case:

• the mortgage guarantor becomes responsible for the repayment;
• the administrator of the inheritance can sell the property and use the proceeds to pay off the mortgage;
• an heir who wants to keep the property can apply to the lender with a request to accept a mortgage in his name (but (!) the heir is never obliged to take on the mortgage of a deceased family member).

How easy it is to reschedule your relative's mortgage depends on whether you are the legal heir and whether there are other applicants. If there are other heirs, you need to negotiate with them about whether you can take over the mortgage and keep the property.

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But if you're the sole heir and don't have a loan guarantor, your path to getting a mortgage should be easy.

Taking ownership of real estate

To take on a deceased relative's mortgage, you must secure title to the property. First, depending on the state in which he lived, your relative's property may need to be probate.

A will is a legal process of transferring property from a deceased person to his heirs. According to the last will, the court evaluates the assets of the deceased person, pays his debts and distributes the remaining assets among the heirs. If your parent did not leave a will, the courts decide how to distribute his property.

When you own a home, you can ask the lender to take over the mortgage.

Mortgage

If you want to keep the house, it's best to continue paying the mortgage after the relative's death. In this way, you will avoid the risk of foreclosure by keeping the mortgage loan in its current state and demonstrating that you can make payments.

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After obtaining ownership of the house, contact the lender and let them know that you have inherited the property. The lender can walk you through the mortgage process and also require you to provide proof of your relative's death and that you are the legal owner of the property.

In addition, you will need to purchase homeowner's insurance in your name as required by the mortgage lender. You may be able to contact your current insurance company and they will transfer your existing policy to you. Or you can look at new plans for homeowners and change the insurer at will.

In the meantime, until things are official, it's a good idea to keep paying insurance and mortgages to maintain their current status. If you have any questions or need help with the mortgage process, please consult with an experienced real estate lawyer.

Once you have your mortgage reissued in your name, consider refinancing opportunities.

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