Inherit a Mortgage
Real estate is often passed down through the generations. It's not uncommon for children to inherit the home in which they grew up. Inheriting free and clear property is different than inheriting property that still has a mortgage balance. In order to inherit a mortgage on a home, you'll need to take a few simple steps.
Instructions
1. Speak with the current owner of the house. This could be a family member or a friend. You'll need to gain their consent prior to beginning the process. This is a crucial step--this person will be deeding a significant asset to you.
2. Obtain a blank quitclaim deed (see Resources). A quitclaim deed can either add or remove someone from a piece of real estate. The form must be filled out entirely by the current vested owners, the new (or former) vested owners and a notary public. The form must be witnessed and signed by the notary public.
3. Record the quitclaim deed at the Registry of Deeds in the town where the house is located. You can either bring the quitclaim deed yourself and pay the recording fee or hire an abstractor (from a title company) to handle to recording. Confirm the recording by finding the book and page on which the document is recorded. You are now a legal vested owner on the property.
4. Hire an estate attorney with the current owner of the property, if one is not already on a retainer. The current owner will need to adjust his or her will to reflect you as the beneficiary of the property. Even though you are currently a vested owner, the handling of a deceased's estate can get messy if the will is unclear.
5. Refinance the mortgage after the death of the previous owner. The mortgage will remain in the deceased's name until you refinance. If you are the sole owner on the property, you'll need to have enough income to support a new mortgage. Do a debt-to-income ratio (DIR) calculation to verify this. Divide your current expenses by your gross monthly income. A qualifying DIR is usually below 40 percent.
Tags: quitclaim deed, current owner, owner property, form must, notary public, vested owner