Inheriting a house from a family member is an emotional event for most people. It may be a home where you grew up as a child or where you spent time in your youth with many memories attached. When you inherit a house that belonged to your parents, spouse or other relative or friend in New York, you will need to find out whether or not there is a mortgage on the property or whether the decedent owned the property free and clear.
Part of the job of the administrator or executor in administering a New York estate is to find out whether there are any mortgages on estate assets. It may be necessary to sell the home in order to distribute the inheritance to a beneficiary because the bank may have an acceleration clause that is triggered by the death of the decedent. The home needs to be appraised either by a certified New York home appraiser or by a local real estate agent who can prepare a comparative market analysis to determine its current market value.
Generally, when inherited property is owned free and clear, the titled passes to the rightful heir through the probate process. If you are a beneficiary of inherited property, you should consider your inheritance a true windfall because your loved one was so generous in leaving the property to you. Once title has been transferred to your name and you are the legal owner, you can sell or convey the property, as well as borrow against the property. Before you make any decisions on taking out a mortgage on your inherited house, you might also want to talk it over with your immediate family and your financial advisor to make sure you can afford the costs of borrowing and the monthly mortgage payment.
You may be able to take out a home equity mortgage on your newly inherited property if you need to use the money to remodel and update the home. Talk to your bank to get pre-qualified for the mortgage so you know how much you are able to borrow based upon your creditworthiness and the home’s value. The lender will require that you pay for a home appraisal if you do decide to take out a mortgage. The lender has certain lending guidelines that you must meet in order for them to give you a mortgage on the home. They want to me make sure you have enough steady income to make your mortgage payments and that if you default, they can sell the home to get the balance owed them on the loan.
Since there are many details that are involved when you inherit a house, it is highly recommended that you discuss them with a New York probate and estate attorney as well as the executor or personal representative of the decedent’s estate. An attorney can also assist with other estate matters such as probate filing deadlines, tax deadlines and resolving disputes amongst the beneficiaries.
If you wish to speak to a New York estate attorney, call the Law Offices of Albert Goodwin at (212) 233-1233.