5 Steps to Take If Your Estate Inheritance Involves a Reverse Mortgage
As the beneficiary or heir of an estate, you may receive real estate that is subject to a mortgage loan. In some cases, this mortgage loan may actually be a reverse mortgage. This type of mortgage is different than a conventional mortgage in that there are typically no monthly payments. Instead, the borrower receives cash from the equity in their home, in exchange for a lien on the property. When the borrower dies, the mortgage becomes due. Then the estate must either sell the property to pay off the loan or pay it off with other assets.
If you are the beneficiary or heir to real estate subject to a reverse mortgage loan in Riverside, consider taking the following steps:
- First of all, carefully review the terms of the will to determine whether mortgages on the property are to be paid off with estate assets.
- Then review the terms of the trust to determine whether mortgages on the property are to be paid off with estate assets.
- Furthermore, have the executor contact the bank to determine the outstanding loan balance.
- Additionally, determine whether the loan can be paid off with available personal assets or through some type of loan arrangement.
- If that is not possible, assess the amount of equity in the home that you will inherit.
To learn more about administering estates in California, view our free guide, The Insider’s Guide to California Probate and Trust Administration. If you found this article helpful, we encourage you to share it with your family and friends on Facebook!
An estate includes the things that a person owns. The things left by someone who has died can be distributed based on a Will, Trust, or Intestate laws. Estates have to be administered in the Probate Court if the estate meets certain criteria. See our Infographic on The Probate Process.