Equity Home Loans

Home equity loans what happens when my mom dies?

My mother who is 85 got a equity loan on her home rather than a reverse mortage loan. I was told today that when she passes the total loan becomes due and payable? Basicly that we can't just keep making the payments. Is that true? She did this loan so the house could stay in the family rather than it being lost at the time of her death? Wat that the right choice any input would be appreciated.

Public Comments

1. the structure of the loan has nothing to do with the ownership of the house. home equity loan just gives her access to cash. mom needs to put it her will that the house is given to a specific individual. i would check with the bank to see what happens in the scenario you outline.
2. The only way for you to continue on with just the payments is if you applied for a loan and she signed the property over to you. You have to qualify for a loan first that will cover all the expenses of the home loan, home equity loan and any fees associated with the new loan. Basically you would be buying her house etc from her.
3. When you mother passes and the house becomes yours, you can get a new equity line to pay off the old one or get a new mortgage that will pay off the equity line and any old mortgage. The equity line may or not have been a good idea, but it's not the worst thing ever. Call your mortgage broker and have a conversation about it to get more info.
4. I'd ask a lawyer. Carefully review all the loan documents. The answer is in there. She may have bought insurance to pay it off on her death, leaving the house free and clear. As executor you may simply have to step in and continue payments. If your name is not involved you might simply wash your hands of it and let the bank take over.
5. Your mother should make a living trust so the house will pass safely to whom she want the house to go. She should see an attorney to set this or any other estate planning that might be needed. If she does not take care of this situation, then when she is no longer with us her property will go into probate and the house and any other of her assets will be divided according to state law. You will also have to get a probate attorney. This probate attorney fees will come out of the estate once it is settled. If you are the beneficiary or whom ever is the beneficiary of your mother's home may refinance the house and pay off any and all loans that are currently on the property. A reverse mortgage may not have been the answer as once your mother pass this loan has to be paid also. I hope this has been of some use to you, good luck. "FIGHT ON"
6. If you are a first time borrower of a home equity loan it is imperative that you have a checklist of essential questions that you need to ask each and every lender. The answers to these questions will provide a valuable reference to base your comparisons on. What’s the interest rate? Knowing this is crucial. The interest rate will determine<!--the monthly payment you will need to make. You also need to know if the interest rate is of a fixed or adjustable nature. Fixed rate implies that the monthly payments will remain constant, while an adjustable rate implies that rates will fluctuate depending on market conditions. http://best-loans.awardspace.com/homeloans.htm In adjustable rate, when will rates change? If your interest rate on the home equity loan is of the adjustable variety, you need to know three things: when the rate is going to change (that is under what conditions), how frequently will the rate change and what’s the average-->percentage by which the adjustable rate will change. What is the Annual Percentage Rate or APR? The APR on the home equity loan will determine the yearly payment you will need to make towards this.The higher the payment in terms of points, the lower is the interest rate.