How can my dad leave me his house in his Will if there is still money owed on the mortgage?

UPDATED: Apr 19, 2011

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How can my dad leave me his house in his Will if there is still money owed on the mortgage?

My dad has named me executor in his Will and would like to leave me his house. Market value on the house is approximately $125,000, with about $50,000 in equity at this time. He has no other debt other than the mortgage and all taxes are up to date. Can I just assume the mortgage and take over payments? Do I need to become a co-owner of the house? What are the options? Should I speak with a probate or real estate attorney? In Craighead County, AZ.

Asked on April 19, 2011 under Estate Planning, Arkansas


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

First of all, if he will leave a surviving spouse, then that complicates things.  However, since you did not mention one, I will assume that your father is not married.  Therefore, since there are no other debts of the estate, you are in a good position here.  The fact is that unless the mortgage has an "acceleration clause" that is triggered by the death of the owner (see note below), the lender is required to continue to accept the monthly payments from the beneficiary/heir to the property until the mortgage's maturity date.  This is of a great benefit to the the person who inherits since they do not have to go through the lender's application process and qualify for the mortgage themselves.

Note:  An acceleration clause is a provision in a mortgage that allows the lender to demand immediate payment in full of the remaining balance of the mortgage if certain events occur (such as the sale of the property,  late payments, or the refinance of the mortgage loan).  Typically, however, it is rare to find such clauses that provide for acceleration upon the death of the property owner.

Bottom line, as long as you make all mortgage payments on time, you should be fine.  However, you may still want to speak to a real estate or probate attorney about how best to hold title to the property under the circumstances.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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