As hard as it is to mourn the loss of a loved one, it can become even more complicated when their assets and debts need to be addressed. One of the more significant responsibilities you will have as the person’s next of kin is taking care of the house they left behind. Besides the mortgage, you also have to worry about taxes, upkeep, sharing ownership with others, and more.
You Have Three Options With An Inherited Property
Your choice will come down to one of three options if you recently inherited real estate: move into it, sell it, or rent it out.
Before making a final decision, it’s important to carefully consider all legal, financial, and emotional implications associated with each option. For example, converting a home to a rental may seem like a great way to profit off the property without selling it, but managing landlord responsibilities is no easy task – particularly for inexperienced landlords.
Prior to making your final decision, you and the rest of the home’s heirs should consider the following factors.
Mortgage
Before you can decide how to handle a mortgage inherited with a property, there are a few things you need to clear up first.
Who’s Responsible For The Property?
Identifying if the mortgage had a co-signer is the first step before worrying about inheritance. If a co-signer is involved in the loan, that person is responsible for continuing payments after the owner passes away.
There are two possible outcomes if there is no co-signer:
- If the deceased person’s surviving spouse still occupies the property, they can continue to repay the property’s debts after their death, regardless of whether the person was initially on the loan. The same applies if the house is inherited by a family member via will or probate.
- Lenders can take possession of the property and attempt to pay off the remaining loan balance by selling the property if the spouse is not living in the home and there are no heirs to the property. In the event that the sale doesn’t cover the existing balance, the lender may be able to seize other assets or simply assume the remaining balance.
What Are Your Options?
You should first contact the loan servicer if you inherit a mortgage and want to keep the house. Before they can provide you with more information on the loan balance, they will need to see a death certificate and verify that you are the heir.
When that’s done, you’ll be able to weigh your options. In case you have the funds, paying off the house is the best option. Unencumbered by a mortgage, you can sell or rent it as you wish. Continuing to make payments is an option if you don’t want to pay off the entire mortgage. Refinancing is an option in certain situations.
Repairs
If everything went according to plan, you would be left with a fully functional house to live in, list, or rent out immediately. Many heirs, however, inherit homes with their problems.
A home’s current condition can help guide your final decision, as how much work you’ll need to do to it will depend on what you decide to do.
Living in It
If you intend to live in the home, you only have to ensure it’s safe. The choice of cosmetic or non-essential improvements is yours.
Renting It
If you plan to rent the house, you will have to put in a bit more effort. Even though renters may not care about more substantial repairs – as the landlord is still expected to fix them – you may need to upgrade your appliances and add unique design features to make your apartment stand out.
Selling It
Putting the home on the market will require the most repair work since buyers want all major renovations completed before purchasing. Conduct a home inspection to determine how much time and resources you’ll need to put into the property.
Co-Inheritance
The process of inheriting a house can become complicated when there are multiple heirs – particularly if the stakeholders disagree on how to proceed. In these cases, all heirs have an equal say, so they must agree on how to proceed.
If you want to sell, you could refinance and buy them out. A buyout consists of one heir becoming the sole owner of the property, allowing the others to walk away with a portion of the inheritance.
Alternatively, if everyone agrees that the home should remain in the family, the next step is to decide how you want to use it. Lastly, you could put the home on the rental market and divide landlord duties among you all heirs.
Co-heirs that can’t agree on what to do may need a third party to make an impartial decision, such as a judge.
We Buy Houses in Louisville, KY
Losing a loved one is difficult enough without worrying about financial obligations left behind. As a result, making the right decision can be even more difficult when you have to balance these new responsibilities with your grief.
At Favor Home Solutions, we can help you sell your inherited house in Louisville, KY, fast for cash. Avoid dealing with the headaches associated with co-inheritance or spending money to revamp the home.
Our team is ready to provide you with the personalized and empathetic service you deserve. We buy houses as-is and close the deal all in under a week, and there are no hidden fees, commissions, or gimmicks. Contact us if you need to sell your house fast in Louisville, KY.
