Can You Keep A Mortgage In A Dead Person's Name
A lot of people are asking the question, can you keep a mortgage in a dead person’s name? What they don’t know is that just because a mortgage is placed in the name of someone does not mean it will remain in that name. The title to a mortgage is transferred when the mortgage is paid off but that does not mean it can be held by anyone other than the original mortgage lender. As stated before there are certain requirements needed to qualify for a mortgage and a deceased person does not meet those requirements.
Can You Keep A Mortgage In A Dead Person’s Name? The Answer Is Yes!
A mortgage in the name of a deceased person can be inherited if there are living parents. If they die intestate (without a will), then their property will be transferred to their children or spouse. This can happen even if there is no will. It will need to be filled out and filed so the property can be transferred. This has to be done before the property can be transferred. It will take some time to go through all of the required paperwork so it is better to have everything in order before this happens.
Another way to take care of a mortgage in a deceased person’s name is to use the equity in the home. When a mortgage is first taken out, the value of the property was used as the down payment. If the person dies, there is still the money in the mortgage to fulfill the loan. This can be used to pay off the balance on the mortgage. There is also the possibility that the original owner will leave the property or sell it. If this occurs, the mortgage holder will take over the title and responsibility for the mortgage. This is how it will continue to be until the mortgage is paid in full. The mortgage holder is the one who will have the legal title and ownership of the property.
If the homeowner dies, the mortgage holder will lose their right to the property. They can end up having to pay off the outstanding balance due on the loan or have to start all over with a new loan. A mortgage that is in the name of a deceased person is difficult to sell because there is no guarantee that the property can be sold. The only way to really know if the property will be successful is by having a court sale. This sale will be open to the public and anyone can attend.
A quick note about foreclosures; they can be extremely complicated for homeowners to understand. If a homeowner is not sure about how a foreclosure works they need to get all of their facts straightened out before signing any documents. Once the documents are signed, it becomes harder to undo them. For more information regarding how a mortgage can be stopped in a dead homeowner’s name, see the National Association of Realtors website.
Related Article: Can A Bank Foreclose On A House In Probate