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The Law Firm of Reed & Mansfield, Attorneys  Personal Injury & Property Damage, Las Vegas, NV

Keeping The Same Mortgage?

Reverse mortgages become due when the owner dies. However, with a traditional mortgage the question often is something like, “If Dad dies and leave me his house (with a traditional mortgage) can I keep making the mortgage payments or do I have to get a new mortgage?”

Years ago when mortgage rates were rising, this was a real concern. However, according to mortgage broker Jason Mevorah, 702-715-8628, mevorahteam@simplifimortgage.com, this is no longer the current situation. First, mortgage rates are falling. Second, more and more the mortgage company is really just servicing the loan. For example, the mortgage billing might be from Wells Fargo, but a different entity actually advanced the money for the house and is getting the payments and Wells Fargo is just getting paid to service the mortgage, so Well Fargo wants to keep servicing the mortgage as long as the payments keep coming in.

 BUT, the home insurance must reflect the new owner to avoid letting the insurance company having a defense, for example to not paying a claim for a house fire. So, our advice would be to let the insurance and mortgage know of the change of ownership—the mortgage companying probably making the mortgage payments out of escrow account.