Arrange to pay mortgage regularly, or for the sale of the house

There are several things that you can do depending on the value of the home, the amount left on the mortgage, and the debts of the estate:

1) Keep the home and handle the mortgage. You can:

• Transfer the mortgage to a family member or other beneficiary: The beneficiary will take on the mortgage with the same interest rate and payment

• Refinance the home loan: You can do this if you can get a lower interest rate or reduced monthly payments

• Have mortgage protection insurance pay off the balance: This is rare, but if you have this, the beneficiary gets the property fully owned

• Use other assets in the estate (or from another source) to pay off the mortgage: You can sell other things in the estate to pay off the mortgage so that the beneficiary can take it freely

2) Sell the home

If the home is worth more than you owe on it, the difference will go to the beneficiaries. You may want to do this, or have to do this, for many reasons:

• The beneficiary doesn’t want the home

• The mortgage is too expensive

• The value of the home should be split among multiple beneficiaries

• The home must be sold to pay off other debts: In some states, creditors must be paid before beneficiaries get anything. In others, creditors can’t force the sale of the house. If this happens, contact an estate attorney.

3) Negotiate a short sale

• If the home is worth less than the balance on the mortgage, you can talk to the lender to see if they are willing to do a sale with no liability to the estate.

• If this does not work, the lender can foreclose, but this risks some liability.

4) Deal with a reverse mortgage:

If the deceased person took out a reverse mortgage (a loan based on the value of the home that is due when the last borrower or eligible spouse dies), you can:

• Pay off the balance with cash from the estate or a different source and keep the home

• Sell the house, repay the lender, and inherit whatever is left

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