What Happens To Inheritance Properties With Home Equity Loans?
You can get a large inheritance without financial penalty! We know the top secrets for helping you to keep what is yours.
If you have recently inherited property with a current equity loan, you are definitely much better off than if you inherited prior to 1982. the Garn – St. Germain Depository Institutions Act was passed that year and guarantees that the inheritance property will not be immediately foreclosed upon at the time of transfer.
Did You Also Get a Cash Inheritance?
Now, the law states that someone who inherits property with an outstanding loan can simply take over the payments on the existing loan. Obviously, the loan can be paid off at any point. Sometimes, if you receive a property with an equity loan, you will also receive the cash equivalent of the equity loan as well.
Talk to the Current Lender
The best way to find out what will happen to property you inherit, is to talk to the lender and find out their policies. In general, the more equity that is built up in the property, the better your chances of getting a different loan for the property. Again, it’s always best to speak with the original lender to find out how they can best help you with the inheritance of the property.
If You are Married
Be aware that in most cases, real property acquired during a marriage is split during a divorce. However, the law indicates that most of the time inherited property and money is not included in this split. Most people will probably never have to deal with this eventuality, but it is always better to be prepared and armed with knowledge. When you inherit with a home equity loan or a mortgage, the story may be a little different. Any money paid toward the loan from marital assets could actually give your spouse a financial interest in the property.
Leave a Reply