What Happens if I Inherit Property With a Mortgage?

10/05/2009 - Wills and Estates - State: TX #18941

Full Question:

My Mother has a home and she is still making payments on. She would like the home to go to me if something should happen to her. If she still owes money on the house, how do we transfer the house to me without me having to refinance the it?

Answer:

The estate would need to make sure to have assets to pay off the mortgage if the mother dies. When you inherit property with a mortgage, paying off that mortgage loan is the responsibility of the estate, not the heirs. If the estate lacks the money to pay off the mortgage and the bank decides to foreclose, it should not negatively affect the credit histories of the heirs. While the heirs could do a deed in lieu of foreclosure with the mortgage lender, that action would not affect the original mortgage loan whose non-payment triggered the foreclosure to begin with. If the property was left to a party other than the surviving mortgage holder, they are legally responsible for the debt, and the property may have to be refinanced into the inheriting party's name. If a will makes no mention of the property, then the surviving mortgage holder is responsible for the remainder of the mortgage. If there is no will for the deceased, a court will determine what happens to the property. Please see also: http://www.reallygreatrate.com/mortgagenews/Most_costeffective_way_to_inherit_real_estate.htm

Please see the information at the following links: http://definitions.uslegal.com/a/assumable-mortgage/ http://definitions.uslegal.com/r/refinancing/ Please see the forms at the following link: http://www.uslegalforms.com/wills/texas-will-forms.htm

10/05/2009 - Category: Wills and Estates - State: TX #18941

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