What happens if you inherit a house with a mortgage?
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What happens if you inherit a house with a mortgage?
Asked on September 23, 2011 under Real Estate Law, Nevada
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
The bank is entitled to be paid--the loan is not satisfied, voided, or discharged by the death of the owner and the fact that the home passes to another. If the mortgage is not paid, the bank may foreclose.
You have two options:
1) Disclaim the inheritance--that is, don't accept the house. You can't be made to take an inheritance. This would be the thing to do, for example, if the home is underwater on its mortgage.
2) Take the house and pay the mortgage--if you inherit the home, you'll have to pay the mortgage, but then you can do whatever you want legally with it: live in it, lease it, sell it, etc. This would be a good choice if, notwithstanding the mortgage, there's alot of equity in the home.
An attorney can help you carry out whichever option you decide on. Good luck.
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