Loan status depends on what the deed says

Question: Years ago I bought a house with my girlfriend, and it was titled in just her name, as was the mortgage loan.

Several years later, we deeded the property into both of our names, even though we never got married.

She has since died, and I have continued to pay the mortgage. Is there any reason that I should put the loan into my name?

Dave

Answer: You actually have two issues to consider: Whether you have to change the loan and whether you actually own the entire property.

When a property is transferred to people who aren’t married to each other, title can be held either “jointly” or “in common.” If it was held jointly and one of the owners dies, their share of the property automatically goes to the other owner. But if the home was held “in common,” then the deceased owner’s part goes to his or her heirs.

Look at the deed and check for the words “as joint tenants with right of survivorship” after your names. If you see those words or something similar, you own it jointly. If not, then the ownership was in common.

If the property was owned jointly, then the lender can’t make you pay the loan off because your girlfriend died — as long as you make the payments. But if the home was owned in common and her heir does not occupy the house, the bank can make you pay the loan in full.

In reality, most lenders leave well enough alone as long as the payments keep coming on time.

It’s still a good idea to do things the right way, and you should reach out to the lender’s “assumption department” to deal with this.

You shouldn’t have problems getting the loan transferred. You may also want to look into refinancing the property to take advantage of the low mortgage interest rates currently available.

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