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Assuming a mortgage loan

My husband and I are living in a house that my mother had the mortgage in her name. We had to file bankruptcy before so our credit was not good. She got the loan in her name, but we have always made the payments. She passed away a year ago. My sister and I are the only beneficiaries. My sister wants us to keep the house. I have been told that as long as we make the payments on the house, there should be no problem. But, I want the bank to let us assume the loan. What about our credit? Will that work by SarahPullman438 from Agoura Hills, California. Dec 4th 2013 Reply


Dan Conley (OmniFundInc)
#861 ranked lender in California - 106 contributions

Sarah this is a very common question. If you were on title to the home then you already have vested interest in the house. The fact that you make the payments and assuming that you have paid the property taxes and insurance you also have vested interest in the home. So it will be as simple as you showing proof and then we could refinance the home into your name. We are a direct lender and can work with the fact you have a BK on your credit report. Give me a call and I can work up a quick quote for you.619-785-3888Dan Conley

Dec 4th 2013
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Hello Sarah, thanks for your inquiry. Believe it or not, your situation is not very uncommon and I've dealt with similar clients with your predicament. What I have done in the past is to show that my client had vested interest in the subject property. The way to do that is to show that in the last 12 months, you made the mortgage payments. For example, canceled checks or the bank statement reflecting payments made to the mortgage company.Once that is done the remaining balance of the loan would be refinanced under you and/or your sister's name.I can walk you through the process or answer any more question you may have either on the phone or through email. Hope this answer was helpful.

Dec 4th 2013
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Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 1,386 contributions

Assuming a mortgage is not typically allowed unless the type of mortgage allows that. The process will be similar to applying for a mortgage to refinance the home, by all means talk to the lender that has the current mortgage. Good luck.

Dec 4th 2013
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Robert Hanson (rhanson)
#42 ranked lender in Maryland - 637 contributions

Hi Sarah, You may be able to assume the loan if it is a VA or FHA loan. If not the refinance would be your only option. A few questions: 1) Was your bankruptcy a chapter 7 or 13 and how long ago was it discharged? 2) Has the title transferred into you and your sisters name yet? I am always happy to assist so if you need more information, a pre-qualification, or a competing rate quote you can go to my web page and use my live support button to discuss anything at all with me in an easier format. Web Address is: http://www.loansfromrob.com/quote/ Email is rhanson@gladewaternational.com and direct phone is 240-752-7549. Good Luck -- Rob Hanson

Dec 4th 2013
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Jason Vondrak (jvondrak)
#1 ranked lender in California - 1,412 contributions

In order to assume the loan, it must be an FHA or VA loan that financed the property. If you are not able to assume the loan you also have the option to refinance the mortgage under your name. How long ago was your bankruptcy? And has your credit score(s) improved since them?

Dec 5th 2013
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 4,620 contributions

The Garn-St. Germain Depository Institutions Act of 1982 allows relatives inheriting mortgaged homes to take over their mortgages. Under Garn-St. Germain, you won't need to refinance your deceased parent's mortgage or even assume it. Just notify your deceased parent's mortgage lender that you're inheriting your parent's home, will be living in it, and will be making the mortgage payments. If the interest rate is decent, then your better off refinancing or having the mortgage in your name, but rest assured, the lender cannot call the note due because you inherited the home, only If you don't make the payments on time.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Dec 5th 2013
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Dave Metsker (DaveMetsker)
#1 ranked lender in Oregon - 1,865 contributions

Be sure that the property ownership title is in your names, using a probate if necessary. Then just keep making the payments. Getting the insurance in your name is a little more difficult, but can be done. I have been making payments on a deceased relative's home for over 8 years with no problem. I am available to help you in the probate and insurance area. You may contact me, Dave Metsker, at primefinancial@frontier.com.

Dec 5th 2013
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 2,357 contributions

In theory, the mortgagee has passed away. That would make the balance due and payable. You'd have to acquire the house through probate and then get a loan for yourself. With bad credit, getting a loan will be a problem. I've heard of people in your situation going for years before the bank finds out she passed away. I'd not worry about it for the moment, and work on fixing credit so you'll be ready to do the right thing when the time comes.

Dec 5th 2013
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