What if I cannot afford the mortgage on deceased parent’s home?
In the past, many Americans reached retirement with a paid off house. It was a time when people were largely debt-free. This is not the case today because many people have not been able to save enough for retirement. Therefore, most people carry a loan on the home.
Mortgage comes with the house
When a person dies, the mortgage comes with the inherited house. The most important thing you need to keep in mind is that the loan must be kept current. You do not want the inherited house to go into foreclosure. Most mortgages also require the home be kept in reasonable repair, which means property taxes and insurance also need to be kept current.
Taking over the loan
Although, it is possible to transfer the loan of the deceased over to you as the heir, some people do not want the hassle of having another loan to pay. You may not have the additional income to pay another loan. In addition to this, you may not have enough in savings to take on an additional loan.
Estate pays off mortgage
If you are lucky, the deceased person’s estate may have enough funds to simply pay off the mortgage on the inherited house. You may get a house free and clear. However, there will be continuous costs in maintaining this home, such as property taxes, insurance, and maintenance. You may not be prepared for this stress on top of dealing with the loss of a loved on.
Too much to afford
If the mortgage is too much for you or the other heirs, you can sell the home. There is a lot to think about in making decisions with regard to this inherited house. Even though there is a sentimental attachment to this home, all of the heirs may not be able to afford to keep it or want to live together in this house.