When you inherit a property after a loved one passes away, you become responsible for the mortgage. This can sometimes be problematic if you share the property with one or more co-heirs or do not have the funds to cover the monthly mortgage payment. If you need to refinance an inheritance property for any reason, securing a hard money loan from a reputable lender can help.
Why Might You Need To Refinance an Inheritance Property?
Mortgage loans have a due-on-sale clause that requires the loan to be paid in full before the property can be transferred to another owner. The only exception to this rule is inheritance property; federal regulations prevent lenders from invoking this clause when the property is inherited.
If you are the co-heir of a property, you and the other beneficiaries must reach an agreement on what to do with the property and who is responsible for paying the mortgage. You must buy out the other co-heirs if you want to have full ownership of the inherited property. You may need a large sum of money up front to buy out any co-heirs, and a hard money loan is a quick financial solution that can be paid back quickly and has flexible terms.
Being the sole heir of an inheritance property makes transferring ownership of the property easier. You may assume the mortgage payments of your late loved one. If you cannot afford the monthly payments, refinancing the mortgage loan can help.
How Can You Refinance an Inheritance Property?
If you need to refinance a late loved one’s property, you must first determine whether you are the lone heir or a co-heir. This information can be found in the will of your late loved one. Use the following steps to refinance the mortgage and then use the money you receive to buy out any co-heirs if necessary:
- Add your name to the mortgage deed
- Compare refinancing rates with various lenders
- Get a home appraisal
- Secure a lower monthly mortgage
What Options Do You Have Besides Refinancing an Inheritance Property?
If you cannot reach an agreement for refinancing, you may choose to assume the current payment. You may also ask for a loan modification or rent or sell the property to cover costs.
How Can a Hard Money Loan Help You Refinance an Inheritance Property?
A hard money loan is a quick form of financing with flexible terms. You can secure the money you need quickly to cover a large mortgage payment or buy out co-heirs. Repayment periods are usually short, and hard money lenders are usually willing to work with borrowers who have less-than-perfect credit scores.
When you need to buy out co-heirs to gain full ownership of an inheritance property or need a large sum of money to afford a new mortgage payment if you are the sole heir of an inheritance property, a hard money loan may be the right financial solution for you. HML Solutions offers hard money loans with competitive terms, so if you are interested in securing this financial solution to refinance an inheritance property, contact us today to apply.