Mortgage Question

**weedaisy** · 11-02-2010, 12:11 PM

Both my grandmother and I are listed on the mortgage papers for my townhome. My grandmother has recently passed away and I am worried that the bank will try to get me to refinance.

My husband had been out of work for 2 years and has just recently been hired (has been working for one week) and I am going to be unemployed come January because I have to student teach.

My question is - do you think that the bank is going to force me to refinance? Should I let them know about her death? Am I being shifty by not?

I have been paying the mortgage, insurance, and taxes on the mortgage, which can be proven.

My mortgage is $483/month and I really don't want to lose it or my house because I wouldn't be approved for refinancing.

Thanks for your input.

**Russ** · 11-02-2010, 12:14 PM

No, they can not MAKE you refinance. You are paying the payments, they are getting their money and that's all that matters. I do wonder about your Grandmothers will. Did she leave everything to you?

**Greebo** · 11-02-2010, 12:25 PM

Originally Posted by weedaisy

My question is - do you think that the bank is going to force me to refinance?

No - they cannot force you.

Should I let them know about her death?

Yes

Am I being shifty by not?

Yes

My mortgage is $483/month and I really don't want to lose it or my house because I wouldn't be approved for refinancing.

You wouldn't. Refinancing doesn't affect your old mortgage. When you refinance, you create a new loan and that loan pays off your old loan.

Actually, it's a good idea to refinance right now for two reasons:
1) Rates have never been better
2) You can update the deed to be only in your name.

**Wendy99** · 11-02-2010, 01:00 PM

I would be concerned about what's in the Will as well - will you have to 'divy' up the value of her share with others?

**Nishu** · 11-02-2010, 01:00 PM

They can't kick you out or make you refinance. The terms of the loan shouldn't change at all.

d) Exemption of specified transfers or dispositions
With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—
(1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;
(2) the creation of a purchase money security interest for household appliances;
(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
(4) the granting of a leasehold interest of three years or less not containing an option to purchase;
(5) a transfer to a relative resulting from the death of a borrower;

I would be more concerned about her will than anything else. If she willed her property to someone else you might be in for a fight. I really have no idea how that works though.

**Wendy99** · 11-02-2010, 01:09 PM

I apologize for not saying this in my first post ... I'm very sorry to hear of the passing of your grandmother

**weedaisy** · 11-02-2010, 01:09 PM

Thank you for your responses. I am not usually a shifty person - I guess in this economy of everyone losing their homes, and banks being weird, I was worried about what would happen with my home. I was worried about this because 1. I don't have good credit anymore and 2. I am not going to have a job soon. I will be able to pay the mortgage though.

Before my grandmother died she quit-claimed the deed to me, I am the sole owner of the home. My grandmother rocked!

**Wendy99** · 11-02-2010, 01:15 PM

Originally Posted by weedaisy

Thank you for your responses. I am not usually a shifty person - I guess in this economy of everyone losing their homes, and banks being weird, I was worried about what would happen with my home. I was worried about this because 1. I don't have good credit anymore and 2. I am not going to have a job soon. I will be able to pay the mortgage though.

Before my grandmother died she quit-claimed the deed to me, I am the sole owner of the home. My grandmother rocked!

Totally understandable - no one wants to lose their home! I'm just curious, in Canada, we refinanced our home and we had to show proof of income etc (but then again we went for a slightly higher amount), would the OP have to proof that she now has enough income (without her grandmother) and good credit to carry the mortgage in the event of a refinance ?? So glad your Grandmother left you the house too

**Nishu** · 11-02-2010, 01:23 PM

Originally Posted by Wendy99

Totally understandable - no one wants to lose their home! I'm just curious, in Canada, we refinanced our home and we had to show proof of income etc (but then again we went for a slightly higher amount), would the OP have to proof that she now has enough income (without her grandmother) and good credit to carry the mortgage in the event of a refinance ?? So glad your Grandmother left you the house too

She shouldn't, the mortgage company is not allowed to demand payment in full for the mortgage just because one of the cosigners passed away.

My stepdad passed away a few years ago and my mom had to submit a bunch of paperwork on the loan but she was allowed to transfer it to her name keep paying on it. There was no way she would have qualified for a refinance if she had applied. She wasn't even on the original loan.

In this case I wouldn't even attempt a refinance given OP's situation and the fact that grandmother signed for it in the first place.

I'm very sorry to hear about your grandmother too, OP. Sounds like she was a nice lady.

**mndtrp** · 11-02-2010, 08:11 PM

Let us know what happens with the bank, please.

**Natalia** · 11-02-2010, 10:04 PM

You guys didn't happen to have mortgage insurance added, did you? If so, then you would own a fully paid for house, free and clear, If she purchased the house and then just added you to the deed, you may not know that mortgage insurance is covered? Might be worth a call to the mortgage company.

**weedaisy** · 11-03-2010, 09:01 AM

I will let you know - although it might be a while. My car was just totalled and my daughter is going in for surgery next week so this is at the bottom of the "must do list".

I don't believe my grandmother purchased mortgage insurance. I think that would have raised the mortgage payment and she wanted to keep it at a managable level for me.

**Greebo** · 11-03-2010, 09:23 AM

Good. Mortgage Ins. is a rip off anyway.

If you want to "insure your mortgage" - get a 30 year term life policy for the value of the house. It'll cost you about 1/5th as much premium as those mortgage insurance plans.

**Natalia** · 11-06-2010, 11:30 PM

That depends on hoe much you owe! Yes when you have paid off most of the house then its wise to cancel mortgage insurance when it comes for renewal. But I got coverage for dh's passing (I was rejected as I have a disease) for $7 a month- on $125K it's not bad, we also have a term policy for him and it's approx the same amount for about $50,000

and at the risk of sounding insensitive (I apologize in advance)
it's not a ripoff if you get to collect!

**Greebo** · 11-07-2010, 04:08 AM

Originally Posted by Natalia

That depends on hoe much you owe! Yes when you have paid off most of the house then its wise to cancel mortgage insurance when it comes for renewal. But I got coverage for dh's passing (I was rejected as I have a disease) for $7 a month- on $125K it's not bad, we also have a term policy for him and it's approx the same amount for about $50,000

and at the risk of sounding insensitive (I apologize in advance)
it's not a ripoff if you get to collect!

In your case, yes, $7/mo for $125,000 wasn't bad. Ok - not ALL Mortgage Insurance is a ripoff.

But more often than not, it is. And it is not based on what you owe.

It's based on what it costs for what you owe.

I owe ~$235,000 on our primary residence. I get offers weekly for mortgage insurance. The mortgage insurance for $235,000 costs about 4x per month what we would pay on the same amount with term insurance.

IF you can get mortgage ins. that's cheaper than the same amount of term ins. by all means, go for it - but most of the offers you get won't be cheaper - they'll be WAY more expensive.