Submitted by [deleted] t3_10p58wk in personalfinance
[removed]
Comments
NotYourDude t1_j6ibcgu wrote
Is that all it takes? My concern (and ignorance) would be how the bank would then handle the existing mortgage. The bank would honor my will and then it would be assigned to my fiancé?
kylejack t1_j6ic1sr wrote
Federal law requires banks to allow family members to assume the mortgage if it's left to someone at death, but the same does not apply to unmarried partners. If she can afford the mortgage and credit is okay, there is a good chance they will let her. If they don't let her, she would need to either secure a new mortgage with another lender, or sell the house and she can take the equity and buy or rent somewhere else.
One idea is to have a secret courthouse wedding right now and then save the full wedding event with family and friends for later. Nobody has to know but you two and the justice of the peace.
kbc87 t1_j6ic1r5 wrote
Either your estate will have to pay off the mortgage or she will need to keep making the payments on it. But yes she can get the loan transferred to her. They may make her refinance it, but it can and would be done in that case.
wickedkittylitter t1_j6iphx4 wrote
Not correct. An unmarried partner has no right to assume a loan. The bank may allow it, but they are not legally obligated to do so.
kbc87 t1_j6iq8iz wrote
Hence I said they may make her refinance..
manwnomelanin t1_j6iemnl wrote
Get term life insurance with the death benefit for the amount of the mortgage and list her as the beneficiary
jessda t1_j6ibnub wrote
Just to clarify, until you pay off the mortgage the bank has the title and owns the house.
hellolittlebears t1_j6idpo9 wrote
That’s not accurate. You do in fact own your home, but the bank has a claim to it if you fail to pay your mortgage.
itsdan159 t1_j6iearq wrote
Yeah I usually say "let someone slip on some ice on your property, you'll find out fast who actually owns it, and it's not the bank"
KennstduIngo t1_j6imgwr wrote
And the bank has never, not once, come to cut the grass when I called them and told them it was getting long!
jessda t1_j6kquj7 wrote
The bank holds the title until it’s paid. That the “legal owner”. Very confused as to why that’s a debate.
NotYourDude t1_j6ibzih wrote
Yes I know, and is the real genesis of my question.
kylejack t1_j6ii0ax wrote
This varies by state. In some states the homeowner is the listed owner on the title, with the bank having a lien. Even in states where the bank is listed as the owner, they don't have a lot of powers you might expect of an owner, such as the right to sell the house whenever they want.
meamemg t1_j6ibemj wrote
Adding someone to the mortgage involves who is responsible for paying for the debt, not who owns the house. Get a will.
Vivid_Speech3773 t1_j6iivtx wrote
TLDR: A will to insure fiance inherits the house and enough term life insurance so finance can at least pay off the mortgage. Boom, done. . . First, make absolutely sure that any advice you decide to follow is in accordance with Indiana state law.
Second, seriously consider a short visit with a lawyer specializing in Indiana inheritance law. Initial consultations of 15 minutes or less are either free or low cost. Bring copies of your mortgage documents, title insurance, and any other paperwork from when you bought the house. Along with a written list of questions that you want answers to.
Assuming you have a will, take out enough term life insurance to cover the cost of paying off the mortgage, a years worth of property taxes and home owners insurance, and at least 6 months of utility bills. As well as the costs of probating your will and burial costs.
This way, your fiance won't have to deal with your mortgage company along with grieving and dealing with probate.
(edited for clarity)
[deleted] OP t1_j6idgzm wrote
[removed]
TholosTB t1_j6idr5q wrote
When my wife and I got engaged, we revised our wills and our lawyer chose some non-specific term like "my dear friend TholosTB" instead of fiance in order to avoid any weird loopholes as our status changed over time.
manwnomelanin t1_j6ietjo wrote
Most people use term life insurance for your mortgage concerns.
Get term insurance with a death benefit for the amount of the mortgage and list her as the beneficiary.
God forbid you kick the bucket, the house will be paid off with the insurance payout and she won’t have to worry about it.
ste1071d t1_j6ik24h wrote
She won’t be able to assume the mortgage if you’re unmarried, no.
You can leave her the house in your will and make sure she’s the beneficiary of your life insurance (if you don’t have any outside of your job, get your own term life insurance now) and she can pay off the balance out of that.
lakehop t1_j6irsgg wrote
Will and life insurance with fiancée as the beneficiary to pay off the mortgage, if the concern is she won’t be able to remortgage it.
kinda-sorta-retired t1_j6iud62 wrote
Google “Indiana transfer on death deed”
That’s what you’re looking for. There are companies that will sell you the forms to complete and file yourself, and sell her the forms to complete in the event of your passing.
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PM_Georgia_Okeefe t1_j6ijq0s wrote
Best move is to put the house in a trust and make her the beneficiary.
kbc87 t1_j6iawix wrote
You can create a will that says she gets the house or you can add her to the title.. She doesn't need to go on the mortgage.