If someone dies while owing money on their property, what happens to the property ?
- curtisports2Lv 73 weeks ago
It depends on a number of things.
In the US, immediate family members are allowed by law to take over the debt.
If the family doesn't want to do that, the executor or administrator of the estate of the deceased will oversee the sale of the property. The debt will be paid and any equity in the property will go to the estate.
The executor or administrator of the estate can keep the estate open, rent the property and make the payments. Rental income goes to the estate.
- 3 weeks ago
all debts go to the estate and are paid before any inheritance is given
- 3 weeks ago
The person who takes it over also takes over the payments. IF NO ONE takes it over the BANK or LENDER gets it by default and they can resale it.
- 3 weeks ago
In the US a direct heir who is left a property in a will, can take over the existing mortgage without the requirement to refinance using the 1982 Garn-St. Germain Depository Institutions Regulation Act.
If the property is owned by a husband and wife jointly with rights of survivorship, it automatically goes to the surviving spouse who will need to continue to pay the mortgage.
Best to take out a life insurance policy against the mortgage so that it can be discharged on death. These are not expensive as the amount of the mortgage declines as the person gets older.
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- STEVEN FLv 74 weeks ago
All debts, including the mortgage must be paid before anyone can legally inherit anything. The source of funds may or may not be from selling the property.
Whoever would inherit the property may be able to negotiate with the lender to take over the remaining loan. It is also possible other assets in the estate can be used to pay the loan.
The only thing certain in the US is that if everything the deceased owned is not enough to pay off all the debts, the heirs don't get anything, but don't owe the unpaid debts either.
- MaxiLv 74 weeks ago
All debts are paid before anyone inherits anything..... and a mortgage is a debt, so if they had money in the bank, a car, shares they could be sold to pay off the mortgage, if not the property is sold, debt ( and taxes) are paid and whoever legally is next of kin, inherits what is left
- NosehairLv 74 weeks ago
There is presumably an heir to inherit the property and estate, either intestate or with a will or trust, and they or the executor or person administering the estate would have the opportunity to pay off the debt. The debt is owed by the estate and it would be paid off with money in the estate, the heir's personal money, sell or refinance the property for the funds needed to pay the debt. It is highly unlikely an heir would simply walk away from the property.
- SlickterpLv 74 weeks ago
It gets sold and the debt gets paid off or an heir refinances and pays it off and keeps the house.
- Jerry SLv 74 weeks ago
I totally agree with Barry.
- BarryLv 64 weeks ago
It is sold to pay off the debt. By court order if necessary. Or a beneficiary can pay off the debt if they have the means.