Real Estate Law?
My hubby's name and my name are on the house deed. My name and his name were on the loan for 25 years. Then we refinanced. Now, it is only his name on the loan. Both names are on the deed however. My question ..... If he passes before me, will the Bank allow me to keep on paying the remaining loan amount? Or can the Bank force me to refinance and get the loan put in my name?
- SlumlordLv 78 months agoFavorite Answer
There is a federal law (not state, federal so it applies to everyone in the USA) that lenders must allow heirs to take over a mortgage on inherited real estate regardless of their ability to pay (again, this is regardless of the heirs ability to pay, you don't need to qualify on income to take over the loan).
So, you must be allowed to take over the loan assuming you inherit this real estate when your spouse dies (if their are other heirs the bank may require them to be on the mortgage too so make sure this bit is handled in your husbands will accordingly).
Of course if you miss payments on the mortgage (ie didnt really have the financial mean to take over the loan) then the bank can still foreclose on teh property.
- StephenWeinsteinLv 78 months ago
There's a third option. Instead of inheriting all of what he owned, you let the bank have enough of his money to pay off the remaining loan in full, so that you can own the house without having to make any more loan payments. (This approach may also help with avoiding inheritance taxes in some states.)
- babyboomer1001Lv 78 months ago
Some loans are transferable and some are not, and some call for the loan to be due immediately when the lender dies. Read your loan documents. If yours is not transferable, because you are his spouse, they may not care if you continue to make the payments. If he dies before you, just continue to make the payments.
- ron hLv 78 months ago
you could ask a lawyer, but you'd probably get a good answer from the mtg co. They COULD allow you to just make payments, but it could get difficult if one one your kids wanted to mess with you.
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- JudyLv 78 months ago
most likely you can just pay it.
- SlickterpLv 78 months ago
They can force you to refi, yes. Whether or not they would is another question.
- KISS MY GRITSLv 68 months ago
The bank does not care as long your payments are on time.
- realtor.sailorLv 78 months ago
How to Take Over a Mortgage of a Deceased Spouse
Written by Teo Spengler; Updated June 22, 2018
In the best of all worlds, a spouse who is liable on the home mortgage buys life insurance to pay it off in case she dies. But often this option gets postponed until it's too late. Fortunately, some federal protections are in place that allow a spouse to assume a mortgage in some circumstances. The laws are dense and complex, however, so you probably want to work with an attorney.
Protections Under Garn-St. Germain
It's tough to lose a spouse, and especially hard when her death triggers financial issues involving the home you live in. Many loans have "due-on-sale" clauses that allow the lender to call in the entire loan if the debtor dies. There are laws in place that protect some spouses in this circumstance, allowing a surviving spouse to assume the mortgage of the deceased spouse.
When you assume a mortgage, you take it over, essentially stepping into the shoes of the deceased person who was on the loan. The Garn-St. Germain Depository Institutions Act of 1982 imposes restrictions on what a bank can do when the debtor dies. As the surviving spouse, you are eligible for protection under the law if your name is on title, you own the house in joint tenancy or you inherit it from your spouse. It's also necessary that the mortgage be up to date. If you qualify, the bank cannot foreclose and must allow you to assume the mortgage.
- Coffee DrinkerLv 78 months ago
The bank can't foreclose if the payments keep coming.
The loan would go into his estate, and the estate would pay the mortgage while things are settled. Hopefully you have enough assets and/or life insurance that you could just pay off the mortgage. But if you don't, or you choose not to pay off the mortgage, you might have to refinance before his estate can be settled and closed. But you can keep the estate open for a long time (years) if necessary while you work out the details. And as long as you or the estate sends a payment every month the bank isn't going to try to take the house.
- AmyLv 78 months ago
The loan will belong to his estate.
An estate often stays open for a few years to deal with real estate and other illiquid assets. Given that you've been paying this mortgage for 25 years, it must be close to paid off. The bank shouldn't have any objection to you making the last few payments on the existing terms.