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Why is the house I've inherited being foreclosed?
A house gets foreclosed when the mortgage hasn't been paid and the lender applies for repossession. If you inherit a house that's being foreclosed, you will need to pay off the debt. You can do this by selling the property, or if you can afford it pay it yourself to keep the house.
If you’ve recently inherited a house that still has a mortgage on it, you might be worried about what to do next. You can’t afford to make the payments on the mortgage, but the idea of foreclosure is an intimidating one. We Buy Any House have put together this handy outline to ease your concerns and give you all the options available to you.
There are several reasons for not paying the mortgage on an inherited house-
Sometimes, you might not want the property, and so don’t want to put money into it.
Many people think that debt is cleared after death, but this isn’t the case with a mortgage.
You may not have known that there was a mortgage still left to pay on the property.
You don’t know whose responsibility it is to pay the monthly mortgage.
If you’ve missed payments on the mortgage or made them late, there is a risk of foreclosure. If you’re not interested in retaining the property, then this is not too much of an issue for you, but if you do want to keep the property, you will need to go through probate.
What’s the process of probate?
Probate is the legal process that heirs need to go through to properly settle the debt associated with the property and identify who will receive the property.
Probate will clarify the executor of the estate, who is usually named in the deceased’s will; however, if a will is not left this process will take care of this. If the executor is named in the will, probate is still a necessary process to confirm that there are no issues with other heirs or benefactors.
You’re able to do this yourself if you wish, as it’s simply a case of filling out a petition with the probate court. This court can either be in the county that the deceased lived, or where they owned their property if they differ. Admitting the will to probate will give notice to any beneficiaries or heirs, allowing them to object if they have a reason.
This process can be very fast, but it can also take over 6 months depending on the circumstances. At the end of the probate process, executors of the property will be named by the courts in a ruling. Any heirs that want to keep the property will need to fill out a quitclaim deed, which will transfer any interest in the property to them.
After probate has been completed, and the mortgage has not been paid, the heir that owns the property can begin to look into dealing with the mortgage.
What are the options with a house in foreclosure?
There is a chance that the estate of the deceased has a worth that will cover the mortgage of the property, however, more often than not, the inheritor of the property will have to take on the monthly mortgage payments or sell the property to pay off the mortgage in full.
It is important to know that as an inheritor, you are not obligated to pay the mortgage if the property is in foreclosure, unless you are a co-signer, or share a title of the property. You can refuse the inheritance and let the property be sold to cover the payment owed. You may want to bear in mind that if the mortgage is less than the estimated value of the property, it could be a potentially valuable investment for you.
What happens in foreclosure?
If the property is in foreclosure because the payments haven’t been paid in full or on time, the lender will possess the property and can sell it. From the sale, the outstanding mortgage will be paid off.
Once the foreclosure case has been filed, you can request a payoff letter, which will allow you to restart the monthly payments of the mortgage if you decide you want to keep the property and take on the payments. If not, and the property is sold, the mortgage is paid off. If the property sells for more than the outstanding mortgage, the leftover sum will go to you as the inheritor.
When you inherited you may have been wondering, how long does probate take? We’ve outlined the process so you can know everything you need to, easing your mind in a stressful time.
If you’re looking to sell your inherited property yourself to avoid foreclosure and take care of the remaining mortgage, get in touch with We Buy Any House for your free cash offer.