Inheriting a house with a mortgage and what to do
Inheriting a house can be a blessing and a pain at the same time. What do you even do with a house that you inherit? Sell it? Live in it? Rent it out? You have lots of options. Unfortunately if you are inheriting a house WITH a mortgage attached, you have to be more careful about what you do with the house.
When someone passes away or gifts a house to an heir, the mortgage on the house won’t go away. It is still there because the bank that loaned the money on the house still wants to get paid. While this does limit your options, you can still mostly do what you want when inheriting a house with a mortgage.
Below, we explain some details and options you have when inheriting a house with a mortgage in Oklahoma….
The mortgage stays with the house…
…but won’t be in your name. It is weird but when someone dies and gifts a house to an heir, the mortgage doesn’t automatically switch over to the new owner’s name. That means the last owner’s name is still on the mortgage. The bank will not forgive that mortgage and will expect to get paid on time every month.
This means if you don’t pay the mortgage, the bank takes the house back. Because the loan is not in your name, this shouldn’t (check with attorney) affect your credit but you will still lose any ownership of the house you have.
This also means if you sell the house, the mortgage will HAVE to be paid off. When you sell the house the title company will make sure that the first person paid is the bank with the mortgage. Keep that in mind if you plan to sell the house.
Want to keep the house?
So you are inheriting a house with a mortgage but want to keep the house. As we discussed the mortgage has to be paid one way or another. If you decide to keep the house, here is what you can do:
- Just make the monthly payments – make the monthly payments on time and the bank will usually never notice or do anything. They get their money, you keep the house, everyone is happy. Just don’t be late….
- Pay the mortgage off in full – if you have some extra cash and want to sell the house you can either pay the mortgage off in full or refinance the house in your name with a new loan
- Assume the existing loan – if the mortgage on the house has good terms like a low interest rate, you MIGHT be able to let the bank switch that same mortgage into your name. You’d have to pass their credit score and income checks but then you wouldn’t have the weird situation of owning a house but paying a mortgage that isn’t in your name.
If you would like to keep the home as a rental property, but aren’t sure about how this works, call us at 405-673-4901. Our advice is free and we don’t mind helping you figure out the what’s and how’s of being a landlord. Owning rental property can be a great blessing financially but can also drive you crazy and cost you a lot of money if not managed properly.
Want to sell the house?
If you are inheriting a house with a mortgage and want to sell it, we can help. W Properties buys houses in any condition, any where all the time. We can buy your house and pay the existing mortgage off so you aren’t liable for anything. You don’t have to clean or repair anything either. If you want to speak with us about this, call or text at 405-673-4901 or fill out the form below.
Before you can sell, you will want to find out how much of the mortgage is still left on the house. If the mortgage is still pretty high compared to the current value of the house, your options are a little limited on what you can do. Before you do anything, try to find a recent statement from the mortgage company to know about where the mortgage is.
If the amount owed on the mortgage is MORE than the house is worth, call us! We can still buy the house, get the mortgage wiped out by the bank, and get you a little cash. We’ve dealt with that situation a lot and the last thing you want to do is give the house back to the bank.
Here is what one Oklahoman who inherited a house with a mortgage had to say after selling their home to us:
I wasn’t sure what to do with the family member’s house I inherited. With me living out of state, it wasn’t easy to deal with. It was not even in livable condition. Tyler sent me a letter so I rang him up and we ended up striking a deal for exactly what I wanted for it. I didn’t even have to clean the house or anything!
Well that is it for some quick tips on inheriting a house with a mortgage in Oklahoma. Hopefully that information helps. If you have any questions, feel free to give us a call. If we can’t buy the house from you, we can at least help you find a good solution to do what you want. Always here to help!!
Ready to talk with us? Fill out this form and we’ll call immediately