When someone dies and leaves their home to a daughter and there is still a mortgage what does the lender do? @ Mortgages Home Loans

When someone dies and leaves their home to a daughter and there is still a mortgage what does the lender do?

Posted on January 12th, 2009 admin 5 comments

quidproquo888 asked:

Can the family member continue to just make payments? Does the family member need to qualify for a new loan? When the home owner dies is the loan due and payable? If the family member cannot qualify for a loan will they have enough time to sell the house? What is the best method to plan for all of this?

FERNANDO

Personal Finance Family Member, Leaves, Member Need, Mortgage Lender, Sell House
5 responses to “When someone dies and leaves their home to a daughter and there is still a mortgage what does the lender do?”
- v b January 14th, 2009 at 06:02
  
  FLETCHER
  
  The daughter doesn’t get title to the asset unless the estate has paid all debts. If the daughter can’t get a loan, the house must be sold.
  
  The estate needs to figure out a way to pay the mortgage payments until the house can be sold or it will go into foreclosure.
- kapn January 16th, 2009 at 23:26
  
  XAVIER
  
  Estate must be settled if the daughter cannot get a loan it is sold by the bank. See an attorney……..
- doinou January 19th, 2009 at 00:07
  
  ABEL
  
  They continue to collect the payments from the heir.
- lil_missymuffet January 19th, 2009 at 00:51
  
  DANIEL
  
  Quite often ( here in New Zealand anyway) If someone has a mortgage then they must have insurance and usually in the insurance contract would be a clause that if the owner passed away then the insurance will pay out any remaining mortgage.
  It would be wise to seek professional help.
  Good Luck
- Impartial.co.uk January 19th, 2009 at 05:24
  
  BRADY
  
  The mortgage debt would have to be repaid to the mortgage lender from the parent’s estate. If there are not sufficient funds in the estate the daughter could arrange her own mortgage on the property to repay the mortgage debts.
  
  The estate of the deceased parent could continue making payments until the property is sold or the daughter arranges her own mortgage. If these payments are not made they will be added to the mortgage debt until the property is sold. The lender will normally allow time for the property to be sold.
  
  The best way to plan for this would be to arrange a life insurance policy on the parent for the amount of the mortgage and write it into trust for the benefit of the daughter.
  
  By writing this policy in trust the money will go directly to the daughter outside off the estate. If the policy is not written in a trust the proceeds will be paid to the parent’s estate, the problem with this is if the deceased parents leave any other debts the proceeds of the life policy could be used to repay these.
  
  (This answer is based on UK regulations)
  
  Disclaimer:
  The answers above are for guidance only and should not be acted upon without you receiving professional mortgage advice relevant to your circumstances. To find an independent mortgage adviser please go to.