After the death of a parent, you may want to assume your parent's mortgage payments to keep the property in the family. Mortgage assumption is based on your creditworthiness and will not be granted automatically. Work with the mortgage lender to assume the mortgage on the property before it goes into default after the owner's death.
Survivors
The executor of your parent's estate is responsible for handling the paperwork after your parent dies, including the business of the home and any property. If you aren't the executor and no wishes were left as to the home, speak to the executor about your desire to take over the mortgage. The executor should have access to all mortgage documents, including bills and lender contact information. Use the documents to help guide you through the process as you decide whether you are in a financial position to take over a mortgage.
Loan Assumption
The mortgage lender that loaned your parent the money can work with you if you want to assume your parent's mortgage. The lender may want you to open your own loan, with a different interest rate. Once you do, the old loan will be paid and closed, and the new loan will begin. If your parent was getting a more favorable interest rate, work with the lender to meet somewhere in the middle. Looking at other lenders is also an option, though you may be able to bargain with the original lender to help keep the refinancing fees low.
Qualifying
If you wouldn't qualify for a mortgage, it will be more difficult for you to take over a parent's mortgage. A lender looks at your credit history, bank account and employment history to determine if you're an acceptable risk. If you have a spotty work history, bad credit and no accounts, a lender won't let you assume a $250,000 mortgage with a 4.5 percent interest rate. A lender needs to be assured you'll be able to make the payments.
Other Considerations
Don't forget that a mortgage comes with more than just property payments. The value of the house and the area where it is located will determine the annual property taxes. Certain utilities, like heat, cannot be entirely removed without damaging the property. If you don't want to live close by and intend to rent it, you may need to hire a property manager. If the value of the house is far higher than the amount left on the mortgage, you have the option to sell the house, pay off the mortgage and make a profit. Assets of the estate can also go toward paying off the mortgage.
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