Monday, November 23, 2015
When a homeowner dies and there is still a mortgage on the house that can create complications for heirs. If the people inheriting the home do not keep up with their mortgage payments the lender could foreclose on them. Carefully planning ahead is very important for any person wishing to leave a family home to a loved one. Check to see if the mortgage contract contains a due-on-sale clause that might give the lender the right to ask the heir for the balance due. Under the Garn-St Germain Depository Institutions Act of 1982 heirs that are closely related to the deceased can take over the mortgage. If a person is not related then the lender might let them refinance the mortgage. This column provides resources that people with mortgages can use for making estate planning decisions for their homes.
See Jim McNiff, What Happens When You Die With A Mortgage?, Total Mortgage, November 20, 2015.