I Just Inherited A House, So What Should I Do?
Once you’re in contact with the mortgage servicer, you’ll need to decide what you want to do with the house. If there are multiple heirs or you aren’t the executor of the will, this can get complicated, especially if everyone involved can’t agree on what to do with the home.
We’ll talk about what to do when the situation is fairly straightforward, such as an adult child inheriting a deceased parent’s house or a surviving spouse taking over a loan they weren’t originally on. If your situation is more complex or you anticipate conflict among the heirs, speaking with a lawyer may be a good idea.
Can I Sell The Inherited House?
One option is to sell the home to pay off the mortgage and distribute any leftover funds from the sale to the heirs as dictated by the will or the laws of the state.
If you want to keep the home, work with the servicer to get the mortgage transferred to you.
If you can’t afford the monthly mortgage payments under its existing loan terms, ask the servicer about loss mitigation options, such as loan modification, which may help you stay in the home and avoid foreclosure.
If there was a reverse mortgage on the property, the loan amount is due after the borrower’s death. If an heir wants to keep the property, they must repay the loan. Otherwise, they can sell the home or turn the deed over to the reverse mortgage servicer to satisfy the debt, resulting in a reverse mortgage foreclosure.
Can I Refinance An Inherited Home?
Selling a home is an easy solution if there are multiple heirs and no one wants to hang on to the property. But what happens if you want to keep the home and your co-inheritors don’t?
One option is to buy out the other heirs. But of course, not everyone has money to buy out one or several heirs.
A refinance can help you free up funds to buy out the other heirs and assume ownership of the property. But be mindful that buying out the other heirs will make you solely responsible for all mortgage payments.
