What are an person’s rights if they are on a deed but not on the bank loan?

UPDATED: Aug 11, 2012

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What are an person’s rights if they are on a deed but not on the bank loan?

I have a question concerning a property that my wife and I have a bank loan on and are the only 2 people on the deed. I’d like to add my son to the deed so that if anything happens to the 2 of us, he will inherit the property. There seems to be a problem with whether or not the property would belong to him if there exists an outstanding loan at the time of my wife’s and my death. Our bank says that it does not matter to them who else is on the deed and that at the time of our death, they would take the property since the loan is unpaid. If I add my son onto the deed, does he have a chance to retain the property even though there is an outstanding loan? The bank says that he needs to be on the loan prior to our death in order to take over the payments.

Asked on August 11, 2012 under Real Estate Law, New Hampshire


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It sounds as if you are trying to do a little estate planning and that is great.  But this is not the forum to do it in.  You may not be able to transfer the deed (or create a new deed adding your son) because that would violate the mortgage agreement and allow the bank to call in the loan.  You son can, though, inherit the property - under a Will or Trust - and continue to pay the mortgage and the bank can NOT foreclose.  He can continue to pay until it is paid off in fact. The executor would transfer the deed to him after probate. Under the law this is an exception to the "rule."  Get help.  Good luck.

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