Death is a topic that makes a lot of people uncomfortable. It’s like the proverbial elephant in the room. Everybody knows that it’s there, but nobody wants to talk about it. But death is inevitable, and sooner or later, we will all find ourselves in the Grimm Reaper’s to do list. So if death is something that we can’t escape, it is probably best to discuss the practical side of death, for instance, what happens to your Scottsdale-based properties when you die?
Well, given that you left the property without debt, and that you left a will, then, your executor will follow the will after it goes through probate court. Probate is just fancy legal term for a process in making sure that your will is real. However, if you die without leaving a will, then your property(ies) will still go through probate, and the state will decide to whom your property will go to.
The above is an ideal scenario wherein you leave your property(ies) debt free, but what if you die and your property still has a mortgage, what happens then? Let’s discuss several scenarios that can happen and what can be done in those instances. Experts recommend that the heirs should contact the lender soon after a death to discuss the options that are available. While deciding what to do, experts recommend that you keep the loan current, so that you can avoid foreclosure.
Scenario 1: Your heirs take over your mortgage
In most situations, federal law allows for the transfer of the loan to a relative or other heir when you die. Your heirs will take over your mortgage with the same interest rate as you. Though, legal formalities will have to be followed, it shouldn’t be a problem to do this.
Scenario 2: Your heirs opt to refinance the loan
Your heirs can also choose to refinance the loan. This option is best if they can get a lower interest rate or reduced monthly payments.
Scenario 3: Your heirs cannot afford to make monthly payments
If your heirs don’t have the financial capability to carry the loan, then, experts suggest that they can either sell the house through someone who is always listing Scottsdale homes for sale, or in the worst case scenario, they can walk away from their home entirely.
If the loan cannot be salvaged, walking away might be the wisest move. However, if the property has a sentimental value, then, it might be a good idea to contact the lender and discuss the options that you have.
Although nobody wants to die, death is something that we can’t escape. While we will be in eternal slumber free from the cares of this world, there will be people that we will leave behind. It would be wise to make some provision for our loved ones who still have to live in this world. Don’t you think?