Need to assume my deceased parent’s home loan?
My mother passed away a year ago, I have been living in the house, making the payments. The deed is in my name. I need to assume the loan so I can get the roof fixed through the insurance, which is paid for through an escrow account, along with the taxes. The loan and the insurances is in her name still and I was told I can’t authorize anything till the loan is assumed and in my name. I have only started working again and only 3 months. My credit score is 552 and I don’t know what my options or chances of not loosing my house are. Can anyone help me, please?
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According to the Garn-St. Germain Depository Institutions Act, when a blood relative tries to re-title an inherited house, the lender cannot enforce the, "due-on-sale," clause. There is no qualifying for the loan, the beneficiary just keeps making the payments. However the beneficiary also must be an owner-occupant.
The lender will need a copy of the death certificate but, don't worry about her dying a year ago; there's no rush so long as they kept getting their money, it's not a serious issue for the lender.
Another detail, assuming Mom had been in the house awhile, her interest rate is probably higher than today's rates. The lender could be happy to let you stay and continue making that higher return rather than force you to get a new loan with a lower return for them.
Whoever is telling you that work cannot be done until the mortgage is assumed is 100% incorrect. The property is insured, not the mortgage. Get a lawyer to help you with that.
That said, yours is a special case. Because the mortgage is in the name of a deceased family member, the lender cannot use the 'due on sale' clause to 'call in' the mortgage and force the sale of the house. But there's a gray area when it comes being able to assume the mortgage. You will need legal help with this as well.
Yeah that is going to be tough with such a low credit score. But there is something fishy about your story. In order for you to be on title now, you would have to have been on title before your mom passed. And if that was the case, the insurance on the property covers your interest just as much as it did Mom, thus you wouldn't need her to make a claim. And if you aren't on title, but are acting as the executor of the estate, you should also be able to make a claim on your mother's behalf. I think the lender or insurance company is lying to you.
The bottom line is that no lender is going to lend you money unless you prove yourself to be reliable to repay the loan, and your poor credit score says you are not. It may be in your best interest to simply sell the house and take the profits of the sale to improve your credit and buy something of your own. Sorry about your Mom.
Your credit score is too low to be approved for the loan.Your short work
record will not support it either. Talk with the present loan offices and see
if they have a solution for you. Otherwise, selling the house may be an option.
If the home is in your name and the loan is not then you must be second on the deed. Talk this all over with an attorney you need their advise and no one here can give that to you.
I know of a reliable loan company that can give you loan.
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Not all loans are assumable. Read the contract. If it is, then talk to the lender about it. If it is not, then you will just have to continue as you are doing or perhaps, they will allow you to refinance in your name. Talk to the lender.
Your problem is that your score is way too low to allow you to get a mortgage. After your mother passed away, all this should have been settled when the estate went through probate. You need to talk to a lawyer to see what you can do.
Talk to the lender asap. There are special rules for your circumstances to not have to qualify for a loan on your own as long as you pay it. good luck.
Very few loans nowadays are assumable. You may need to refinance into your own name.