QUESTION
RE: NJ Law when heir inherits a home with a 2nd mortgage.
Asked on Mar 30th, 2012 on Estate Planning - New Jersey
More details to this question:
If the heir decides to keep the house instead of selling it, does the heir simply take over the 2nd mortgage payments? Or does the heir have to go through a "qualification process" first, just as in buying a home? Then, if later on the heir wants to renegotiate the 2nd mortgage, I would imagine that could be done as well --yes?
1 ANSWER
2 Awards
The answers to this question depend on the mortgage, and the terms of the will. The will may stipulate that the heirs take the property subject to the mortgage. If that's the case, the heirs can take over the mortgage payments, but technically, the heirs should have the mortgage redone in their name. Changing the title to the property could cause an acceleration of the mortgage and require immediate payment. A bigger question becomes, what happened to the proceeds of the second mortgage? Did the decedent take that in a lump payment and it went to other heirs? Can the first and second mortgages be combined and refinanced? Rates are good now and it might be worth your while to qualify and re-do the whole thing.
Answered on Mar 31st, 2012 at 12:42 PM
Diana L. Anderson, Certified Elder Law Attorney This response is not legal advice and does not establish any form of attorney/client relationship