I Inherited a House - Do I have to Refinance the Mortgage?
No - in most cases. Mortgages generally contain "Due on Sale" clauses, which say that the lender can call the mortgage due upon transfer of property. However, federal law (12 USC § 1701j-3(d)) provides a number of exceptions (emphasis added):
(d) Exemption of specified transfers or dispositions
With respect to a real property loan secured by a lien on residential real
property containing less than five dwelling units, including a lien on the
stock allocated to a dwelling unit in a cooperative housing corporation, or
on a residential manufactured home, a lender may not exercise its option
pursuant to a due-on-sale clause upon—
(1) the creation of a lien or other encumbrance subordinate to the lender’s
security instrument which does not relate to a transfer of rights of
occupancy in the property;
(2) the creation of a purchase money security interest for household
appliances;
(3) a transfer by devise, descent, or operation of law on the death of a
joint tenant or tenant by the entirety;
(4) the granting of a leasehold interest of three years or less not
containing an option to purchase;
(5) a transfer to a relative resulting from the death of a borrower;
(6) a transfer where the spouse or children of the borrower become an owner
of the property;
(7) a transfer resulting from a decree of a dissolution of marriage, legal
separation agreement, or from an incidental property settlement agreement,
by which the spouse of the borrower becomes an owner of the property;
(8) a transfer into an inter vivos trust in which the borrower is and
remains a beneficiary and which does not relate to a transfer of rights of
occupancy in the property; or
(9) any other transfer or disposition described in regulations prescribed by
the Federal Home Loan Bank Board.
What if the home is currently in a living trust? Does the Garn - St. Germain Act still apply? If I am a relative inheriting a home upon the death of the borrower?
RESPONSE: Yes, it still applies.
If you inheirit a home and then divorce, is the home community property even if the spouse is not named as and heir?
RESPONSE: North Carolina is not a community property state. In North Carolina, if you inherit real estate and leave it in your name alone, the property is generally considered separate property so that it is not subject to division upon divorce.
My mom passed away 2 1/2 yrs ago. She deeded her property over to me, she had taken a home equity loan out, since I can find no lien on the property, do I have to continue paying on the loan?
RESPONSE: Have you checked the county Register of Deeds to see if there is a recorded deed of trust for the loan? If there is no deed of trust, you may not be responsible for paying the loan, but I recommend that you consult with an attorney to determine what obligation you might have.
I am the named beneficiary in my mother's will to inherit her house with a mortgage. I am not the Executor. Can I make the regular mortgage payments directly to the bank before the estate settles and I receive the deed? The Executor has not made the February, 2010, payment.
RESPONSE: Under NC law, the real property belongs to be beneficiary as of the time of the decedent's death, subject to the right of the executor to sell it if necessary to pay debts and expenses. You should be paying all expenses for the house. No deed will be issued to you - the will and the death certificate are the evidence of ownership.
My children, all young adults, just inherited a home from their father which still has money owed on it. The home is in Washington State. They wouldn't qualify to refinice the home. Do they have to sell it, or can they just take over the payments?
RESPONSE: Federal law allows them to just continue the payments. They do not have to refinance.
If the decedent's estate is insolvent, are the heirs of real property, in N.C., required to sell the property to pay creditors even though one of the heirs is currently living in the home and wishes to take ownership of the property as his primary residence?
RESPONSE: The administrator/executor must sell the house.
My husband inherited a home from his father which still has a mortgage of 80,000 on it. The home is worth 200,000, at this time the mortgage is more than we can comfortabley afford to pay each month. How would we go about refinancing? Would we be able to get a loan for more than the 80,000 because of the equity in the home? Must we wait until the will goes through probate to refinance?
RESPONSE: You will have to talk to a bank or mortgage broker about refinancing, but you will have to wait until the creditors claim period in the estate passes.
My ex-husband died, left two kids behind ages 22 and 18. They lived with him in North Carolina. The house has a mortgage balance and needs alot of work. If the bank forcloses on the house can the bank go back to their trust, established by him, for the outstanding balance.
RESPONSE: Probably not, but I would need more information to answer more definitively.