Inheriting a home with mortgage presents some financial problems.
Inheriting a home after the death of a relative presents you with various concerns, especially if it still has a mortgage. The best course of action in such a situation depends on your preferences and the condition of the property. Making a decision on what to do with the house requires careful study of documents relating to the property with professionals who can provide you with personalized advice. Making the wrong decision can lead to financial hardships and family conflicts.
Instructions
1. Hire a professional property inspector. Detecting any problems with the place helps you decide whether to sell, rent or move in.
2. Get advice from a real estate attorney to learn your legal rights and obligations. Depending on your particular situation, the attorney can determine whether you are responsible for the mortgage.
3. Pay off the mortgage if you have the cash. If you plan to move in, you may be able to assume the mortgage and make regular payments. If you plan to rent the house, you may have to refinance the mortgage under your own name.
4. Sell the house if you do not want to move in or lack the funds to pay for refinancing. Talk to the lender about a short sale, where the sale proceeds go into paying the outstanding mortgage balance. In some states, the lender may demand that you pay any outstanding debt if the proceeds fall short of the total balance. Before going through with the sale, get the lender to agree, in writing, not to go after you for the balance.
5. Give the house keys to the lender and let the lender repossess the house. Before doing this, however, get the lender to agree to not hold you responsible for the debt after the repossession.
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