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Profile picture for da9iel

Is a HELOC on inherited property due immediately upon inheritance, or after the property sells?

My mom just passed away and I've inherited her home, which I'm currently living in, and have been since she became ill.  She owes $43,000 on a HELOC which is in her name only.  I'd like to know if I'll need to pay the loan off immediately, or will the bank (or banks in general) allow me to pay it off once the property has been sold.  It needs some maintenance, which I think could be done within 4 months.  I'm not currently employed and had been taking care of my mom since she went on hospice care, so transferring the loan into my name probably isn't an option the bank would consider.  I do have enough money in the bank to pay off the loan, but it would be much better spent readying the house for sale.
  • January 23 2014 - West San Jose
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Answers (6)

Profile picture for wetdawgs
I'm so sorry to hear of the loss of your mother, since condolences.   I know you asked this question more than a month ago, have you resolved it?

Ben's response is very good.   The loan was tied to the home in her name, so when the home title transfers to you the estate needs to settle the loan.   Hopefully the lender will have some flexibility as you are planning to sell the home.



  • March 02 2014
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Profile picture for Ben Link
I'm sorry to hear about your mom.

Technically I think the loan is now due in full. When the title to the home is transferred into your name through probate (the settling of the estate), the heloc lender will become aware of the situation.

Others have suggested you contact the lender to let them know the situation, which I think is a great idea. You may want to have an attorney help you with this (perhaps you have an attorney helping you settle your mom's estate).  You might not get pushed around if you have 3rd party representation.

Let them know you are willing and able to continue making the regular monthly payments while fixing up the home and preparing it for sale. 

If they hear 1) the house needs to be fixed up, and 2) you are working towards selling the home, they will hopefully decide it's better you deal with all this stuff instead of them.

Hopefully they will understand the situation and work with you towards a satisfactory resolution for everyone.

Good luck!
Ben
  • March 02 2014
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Suggest you call the lender(heloc) asking for options. Communication is very important. I have seen similar situations where the heir offers to pay reduced monthly payment. During the transfer of title I assume the attorney has already flagged a loan that is not in your name.

As for maintenance it has nothing to do with default. So you can take it slowly.

Sam Shueh
Keller Wms Cupertino Realty


  • March 02 2014
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Profile picture for shapiroamg
As always, you should consult an attorney for the legal answer. As someone who is not an attorney, I would think as long as the payments are going in on time, the HELOC lender is fine. Even if they become aware of your mom's passing, a simple conversation letting them know that the property is going to be sold should make them feel comfortable with the situation. 
  • January 23 2014
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Brian is right, just keep on making the payments and you will be fine.  I do think the bank has a service that notifies them when one of their clients passes away.  There is a filed certificate of death, and I think they have systems or people that search through those at the county level and match them back to the loans so they are notified.  I'm not 100% sure on this. 
  • January 23 2014
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Profile picture for Brian GFL Capital
someone please correct me if im wrong but, banks should allow you to pay it off once the property has been sold.
as long as you keep making the payments in your mothers name you should be able to buy yourself a little bit of time to do the home improvements before selling it.

im trying to figure out how the banks would know that your mother has passed without you notifying them so until they know, they shouldn't be the wiser.
  • January 23 2014
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