My grandmother bought the home we lived in the 90s for 90k at a 8% interest rate. I found out she refinanced the house several times from what seems like predatory practices and malicious advice and now owes 250k at 6%. Basically the house I thought was paid off now has 30 mortgage and she is 90. Her grandkids are in the will to inherent the house but do we inherent this mortgage?
It has a lien attached and that’ll basically ‘stick’ to the house. You can sell the house to pay off the mortgage, or get a mortgage to buy the house and pay off that other mortgage, that kind of thing, but the creditor is gonna be one of the first people in line, in terms of receiving money from any sort of sale or transfer. The creditor has the right to forgive the debt but that almost never happens even in a scenario like this
She couldn’t like sell us the house for less than it’s owed? And she takes a loss?
She’d have to pay the remaining balance before the bank will release the lien.
For a short sale like that the creditor/mortgage company would need to approve. If you’re thinking of doing something like that or simply walking away from it you’d be best off getting in touch with someone who does estate planning, but in any case that mortgage is gonna remain stuck on that house, the house basically serving as collateral for the balance due