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Contact: Amanda Edmunds
I & E Insurance Agency
Paying Off a Mortgage After an Untimely Death
Managing somebody’s estate after their passing is a complicated matter with many different moving parts, but it’s even more difficult to manage if the person wasn’t prepared for their passing. Unfortunately, one thing that’s often the cause of endless headaches, especially in the event of an untimely passing, is the management of the late person’s debts. Here, we’ll help walk you through some of the options when dealing with an outstanding mortgage debt.
Sell the Property
In an ideal world, nobody would have to part with a loved one’s home after inheriting the property. Many homes bear an irreplaceable amount of sentimental value when recounting the memories made there. Without enough money or a large enough income, sometimes people are left with few options except to sell the property in order to clear the outstanding debt. In the same vein, you could also allow the bank to foreclose on the property and clear the debt this way. However, seeing a home with a ton of sentimental value getting foreclosed can make the grieving process more difficult to go through.
Refinance the Mortgage
The other option in the case of an untimely death without enough capital is to refinance the mortgage and deal with paying the associated refinancing fees. This is a better option than letting the bank foreclose on the home or surrendering it. Refinancing allows you to retain ownership of the property and gives you enough time to pay off the rest of the mortgage. This route can be a bit of a time-consuming ordeal, especially if there are multiple beneficiaries that inherit the property, as you’ll then have to ensure everyone is on the refinanced mortgage and agrees with the plan.
Pay It Off With Available Funds
The most straightforward means to deal with an outstanding mortgage is to pay it off in a lump sum. Although, this is likely to be a difficult task to complete without enough capital to cover a single payment that can be in the tens of thousands of dollars, or more. If the individual was lucky enough to have the cash assets to make this payment a possibility, then it’s a much easier decision to make. However, this is typically only the case in anticipated passings and not untimely ones.
Pay It Off With Life Insurance
The best way to ensure that an existing mortgage doesn’t become the burden of your beneficiaries is with the proper life insurance plan. The disbursement of funds from a life insurance policy will give everyone the chance they need to grieve without having to worry about handling the bureaucratic processes of selling a property or modifying the mortgage. Especially considering the case of an untimely death, when everything can seem disorganized and chaotic, the last thing you would want to leave behind is a large debt and an unconcluded responsibility.
If you need help ther eare many options available, plese call us at 732–295-5584, don’t leave problems to your family, call us for solutions.