Inherited a House/Mortgage

leevena

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Five siblings have inherited a home with a $20k mortgage ($250k value). The estate will be closed shortly, and the deed will need to be transferred to the 5 siblings.

What do we need to do with the mortgage. We have been told it needs to be refinanced in each of their names, and we have been told that the mortgage company will allow the siblings to pay the mortgage as is, until sold.

Thanks.
 
I doubt you can find someone to refi a $20k mortgage. The minimum is usually $50k.

And splitting 5 ways is not going to happen.

Why not chip in $4k each, pay off the mortgage, then split the proceeds when the prop is sold?
 
I doubt you can find someone to refi a $20k mortgage. The minimum is usually $50k.

And splitting 5 ways is not going to happen.

Why not chip in $4k each, pay off the mortgage, then split the proceeds when the prop is sold?

Hi Bob, hope you had a good holiday.
This is for my in-laws, and I agree with you, but I am getting the feeling that 2, maybe 3, cannot afford to pay, and probably not get qualified.
 
Thanks for asking Lee. I plan on getting back to you in the next few weeks on our earlier discussions. Want to bounce some of the ideas we discussed off some guys I trust who are closer to the market than I am.

Back on topic, if the others can/will pool their money to pay off the mortgage then take their cut from the proceeds, that should work.
 
Thanks for asking Lee. I plan on getting back to you in the next few weeks on our earlier discussions. Want to bounce some of the ideas we discussed off some guys I trust who are closer to the market than I am.

Back on topic, if the others can/will pool their money to pay off the mortgage then take their cut from the proceeds, that should work.

I agree, and it may come down to me/wife paying it off, but it is getty a little messy.
 
Usually what is done in this situation, is one person gets the mortgage and does a "gift of equity" transaction which is looked at as a refi. They cash out, usually up to 80% loan to value to buy out the other siblings.
 
5 Tenants in common can create all kinds of headaches such as liability issues, survivorship issues, and the fact that any of the 5 can decide to liquidate their interest at any time etc. I'd recommend to sell the property. JMO
 
I agree with all of you, but my question is "can we continue to pay the mortgage as is when the house transfers to the 5 kids?" Is the bank required to allow us to do this?
 
Sell or refute your share of the inheritance if you don't want the headache. You are not obligated to accept. Let the other siblings settle it. My mother made a comment to me over Christmas about we kids inheriting her house in which she has a second mortgage. I think it made her angry when I said we are not liable for any of her debts after she is gone unless we choose to be.
 
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