Can I Inherit Mom's Mortgage When She Dies?

In many families our home is our most valuable possession. We invest a lot in order to have our homes - time, money, work, love, and often tears. It is the place where we gather with those we love. We have dreams of the future, share memories of the past, and plan for tomorrow. as they say "Home is where the heart is."

When we think about losing a loved one we can also be faced with losing the place that holds those memories - the family home. 

 The family politics surrounding the family home can be interesting. Just like with the stuff that is inside of it some might not want it for themselves, but hate the idea of seeing it gone to strangers. Sometimes someone does not want the home to be sold, they do not want it themselves, and they do not want a sibling to have the home either. As with all things related to losing a family member, the internal politics can be... complicated.

Though figuring out the answers related to the family politics is not a legal analysis, the question of how to keep the family home can be made easier knowing that the mortgage company cannot call the loan due when it transfers to a beneficiary through an estate plan, and it also cannot apply the mortgage company's ability to pay rule.

Most mortgages contain an acceleration clause that will allow a mortgage company to call a note due "if all or any part of the property, or an interest therein, securing the real property loan is sold or transferred without the lender's prior written consent." But Federal law prohibits a lender from implementing an acceleration clause where the property is transferred to a relative upon the death of the borrower. This provision allows an heir to retain a property after inheritance without worrying that the mortgage holder will call the note due when it transfers into their name.

So now that you have discovered that you can in fact keep the mortgage on the family home without worrying that the lander is gong to call the note due when you inherit it, do you need to worry about being able to qualify for the mortgage? The answer to this related question is also a solid no. As long as you can continue to pay the mortgage the mortgage holder cannot make you reapply for a loan on the property. You can instead start paying on the same terms as were available to the person you inherited the property from, and can even apply for a modification of those loan terms.

Losing someone you love is a difficult enough time to also be worried about being able to qualify for an obtain a mortgage in order to keep the family home. Luckily we are protected from these difficult challenges and can instead focus on the more pressing concerns of learning to live in a whole new world without someone we love. 

Do not allow the fear of how your things will be taken care of when you are not able to take care of them keep you from putting your plan in place. Reach out today and start planning for what will happen to the family home so those you love will not have to do so  once you are gone.