QUESTION
If I passed away do my children still get my house if I never reaffirmed my loan if I am current and never been late on any payments?
Asked on Nov 03rd, 2014 on Bankruptcy - New York
15 ANSWERS
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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That would be a yes.
Answered on Aug 31st, 2015 at 8:46 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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That would be a yes.
Answered on Aug 31st, 2015 at 8:45 PM
Civil Litigation Attorney serving Ventura, CA
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The Law Office of Robert I. Long
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I uncertain what you mean by reaffirm a loan. That is normally something that occurs in the course of a bankruptcy. No one "inherits" a loan, just the real property. Of course, once the property is in their names they will need to satisfy the lien that is the mortgage or the mortgagee (lender) will pursue its collateral; i.e., foreclose. They may find it necessary to refinance. Legal ownership and debt are separate things, even if they are closely tied together. This answer assumes you are not married and there are no joint owners of the property.
Answered on Nov 18th, 2014 at 2:31 AM
Edwin K. Niles
The loan has nothing to do with title. Under Cal. law, the property would go to your closest kin, presumably your kids. You could save your estate a LOT of money by having a trust. We suggest that you talk to an estate lawyer.
Answered on Nov 04th, 2014 at 4:25 PM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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I'm not sure what "reaffirming" a loan is. Whoever takes your estate (your children, if you are not married and do not have a will) will get your house subject to their need to continue to make the loan payments. "Children" plural means that the house should be sold in probate. The loan will be paid then. But think of this: what's the house worth, $150K, $200K, or more? Isn't it worth getting some estate planning done?
Answered on Nov 04th, 2014 at 2:54 PM
When you die, state laws or your will determines how your property is distributed to your heirs. Your mortgage company does not control the ownership of real estate unless & until payments get behind and a foreclosure takes place. So assuming your heirs continue to make the mortgage payments, they will get title to the property with no problems.
Answered on Nov 04th, 2014 at 2:53 PM
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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Yes, however, they still need to pay off the mortgage.
Answered on Nov 04th, 2014 at 12:57 PM
2 Awards
If you own the home upon your death, yes. The question is do you still own the home if you filed bankruptcy. That is a question for your BK attorney and/or your lender.
Answered on Nov 04th, 2014 at 12:57 PM
Thomas Edward Gates
You can leave your children your home, if you have no spouse. If spouse, only half can be given away. An outstanding mortgage would have to be paid off. Your mortgage documents will specify whether they can assume your loan or need to refinance.
Answered on Nov 04th, 2014 at 11:07 AM
In California, your portion of the house would go to your spouse and if he/she is already dead it would pass to your children. But your assets would have to go through probate for the title to be changed to them. Also, most loan have a provision that they become all due and payable upon the death of the borrower or change of ownership [including putting the title into a trust to avoid probate]. You need to check with your bank/lender and get their approval in writing to allow title to change, but they probably will say no. You also have to consider want happens when all of your children inherit the house. Some may want to sell and other to keep it, some will want to move in and pay no rent to the others, etc. If you do not specify what will happen to the house then they may end up fighting over it. There are all sorts of arrangements you can make to lessen the likelihood of arguments among them. You might want to leave behind some cash or assets easily converted into cash to pay the mortgage until title passes. It would be worthwhile to spend several hundred dollars to see a trust and estate/probate attorney to figure out how best to plan what to do. You should also read the Nolo Press books on estates and trusts and probate to gain some information on the subjects so that you are better able to understand what the attorney will tell you and to prepare your questions of them.
Answered on Nov 04th, 2014 at 11:06 AM
That depends on a lot of factors. Since you mentioned that you have not reaffirmed the loan, I assume that you have filed for bankruptcy. So long as you are not in default under the loan, there would be no reason for the bank to seek to foreclose on the loan. Technically, filing a bankruptcy is a default under most loan agreements. But, most courts will not allow banks to foreclose so long as you are making your payments. You should talk to your bankruptcy lawyer. Also, you should do some estate planning if you have not done so. I recommend looking into a trust with your children as the beneficiaries. You also need to let them know that payments will need to be made to the bank even after you die until the loan ahs been paid off in full.
Answered on Nov 04th, 2014 at 10:07 AM
I'm not sure what you mean by "reaffirming" a loan. Generally, a loan lasts until the loan is completely repaid. However, if you still owe money on the loan on your house at the time of your death, that loan must be repaid first, before your children can inherit. If you have no other assets, your executor may have to sell the house to pay off the loan. Your children would then only receive whatever is left of the selling price.
Answered on Nov 04th, 2014 at 8:55 AM
Commercial Attorney serving Chicago, IL
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Ashcraft & Ashcraft, Ltd.
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The house will pass to heir(s) in accordance with the terms of your Will, if any. If you do not have a Will, the house will pass according to the statute on descent and distribution. A living spouse will receive an interest (50%) and the children will divide the remainder. Any mortgage securing the property will continue to encumber the property. Most mortgages have a due on sale clause that will allow the lender to force the sale of the house or refinance of the mortgage in order to pay off the mortgage when the original mortgagee no longer owns the house. When the lender discovers that you passed away, the lender will require the mortgage to be paid off. The heirs will have to make necessary arrangements or lose the house.
Answered on Nov 04th, 2014 at 8:54 AM
Yes they will you do not have to reaffirm the loan.
Answered on Nov 04th, 2014 at 8:18 AM