For those inheriting property that has a reverse mortgage, it’s important to note that while a reverse mortgage was a great source of income for the decedent prior to death, that money has to be repaid to the lender, including all of the capitalized interest thereon, writes The Huffington Post in a recent article.
A reverse mortgage is one of 10 possible surprises one might encounter when inheriting real estate, article notes.
“Your real estate inheritance with a reverse mortgage will not be owned by you free and clear,” Huffington Post says. “Instead, the real estate will be encumbered by a significant mortgage that you cannot make monthly payments on and instead, such mortgage needs to be repaid prior to you calling that real estate your own home.”
Based on New York law, those inheriting real estate with a reverse mortgage have 30 days after the date of death to notice the lender whether they intend to pay off the mortgage from other monies, a refinance, or a sale of the real property.
“All are advised to speak to an attorney whenever inheriting any property,” Huffington Post says.
Read the article here.
Written by Cassandra Dowell