Personal Finance

3861 readers

16 users here now

Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!

Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)

founded 2 years ago

MODERATORS

[email protected]

House refinanced 3x (reddthat.com)

submitted 3 months ago by [email protected] to c/[email protected]

25 comments fedilink hide all child comments

My grandmother bought the home we lived in the 90s for 90k at a 8% interest rate. I found out she refinanced the house several times from what seems like predatory practices and malicious advice and now owes 250k at 6%. Basically the house I thought was paid off now has 30 mortgage and she is 90. Her grandkids are in the will to inherent the house but do we inherent this mortgage?

you are viewing a single comment's thread
view the rest of the comments

[–] RunningInRVA 19 points 3 months ago (2 children)

Her estate is responsible for the mortgage. You have to pay the mortgage out of whatever resources her estate has or “sell” the house to the grandkids at which point they are responsible for the mortgage. The bank has to get their money somehow. If the grandkids don’t want to assume the mortgage and the estate doesn’t have the money to pay the mortgage then you will default and the bank will foreclose and take the house to auction.

[–] [email protected] 3 points 3 months ago

The grandkids can buy the house at that bank auction. (Although they could be outbid, naturally.)

The estate would still owe the difference, and may be insolvent due to that, but the grandkids would not owe that difference / have to assume the mortgage.

Assuming the estate is in debt and loses money on the house, the bank may be more involved in other aspects of the estate. For example they may want items of value (eg: jewelery) to also be sold at auction rather than gifted to heirs.

Just saying that you may wish to pick your battles.

[–] [email protected] 1 points 3 months ago (1 children)

Would there be any advantage to convincing her to sell before her passing? Im assuming the remaining balance of the sale would go to us anyway?

[–] RunningInRVA 4 points 3 months ago* (last edited 3 months ago) (1 children)

I would not let the house go to auction. That will be the least advantageous. Having her sell now means that she has to have the balance of the mortgage available at closing to pay down the loan. That would of course reduce the value of her estate and then it’s less going to the grandkids or whoever. Whether she or her estate sells when she is alive or afterward is likely moot. She still owes the bank the balance of the mortgage no matter what.

[–] [email protected] 1 points 3 months ago

Ok going to auction is the worst possible option. I'll make sure to make that clear to everyone. Appreciate the help.