Paying off house that is in estate
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Paying off house that is in estate
I understand the basics of paying off a mortgage. I am living in my mother's condo and paying the mortgage. I moved there shortly before she unexpectedly died, and we had not changed ownership. She lived in Florida. That home is in trust and will be sold. I am the executor and trustee.
The mortgage is 3.125%. That in itself is no reason to pay it off There is about $65,000 left on a 20 year mortgage that matures in 2030. There is no date to close the estate, but at that time, I do not want to remortgage it. It is highly likely I will be relocating in the next year or two.
Do I wait and keep cash in high interest savings until I have to close the estate and take ownership, or do I pay it off now and be done with it? The lawyer knows the situation.
The mortgage is 3.125%. That in itself is no reason to pay it off There is about $65,000 left on a 20 year mortgage that matures in 2030. There is no date to close the estate, but at that time, I do not want to remortgage it. It is highly likely I will be relocating in the next year or two.
Do I wait and keep cash in high interest savings until I have to close the estate and take ownership, or do I pay it off now and be done with it? The lawyer knows the situation.
Re: Paying off house that is in estate
Are you the sole beneficiary of the estate and trust? Is the trust terminating? Are you paying the mortgage from estate funds or your personal funds? That might have a bearing on the advice you will receive.
Gill
Gill
Cost basis is redundant. One has a basis in an investment |
One advises and gives advice |
One should follow the principle of investing one's principal
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Re: Paying off house that is in estate
My brother and I are beneficiaries of the estate and trusts. It has already been determined that I will own the condo, and the equity according to the step up basis has been worked out. This condo is in estate. I have paid and continue to pay from my personal funds. That includes escrowed taxes and insurance. The insurance is in my name.
Re: Paying off house that is in estate
No reason not to pay it off but if you do that and your brother is an equal beneficiary, you should distribute an equal amount to him.
Gill
Gill
Cost basis is redundant. One has a basis in an investment |
One advises and gives advice |
One should follow the principle of investing one's principal
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Re: Paying off house that is in estate
We have the value of the condo worked out with other assets. He and have fortunately done very well working together.
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Re: Paying off house that is in estate
I wouldn't pay it off; that's a great rate!
When my mom passed in 2008 I kept her first mortgage (situation was complicated but it made sense not to refinance in my name) and transferred title from the Trust's name to my Trust. I sold the condo this last July nine years after she passed.
You'll want to submit paperwork which authorizes you to have access to the account. I think I had to provide the death certificate.
The only (minimal) complication was after the loan was paid off I got a check for around $50 made out to "Estate of Carefree's Mom". I Since I had closed the estate seven years before there was no Estate bank account. I simply did a mobile deposit on my phone and sign my name with TTEE. No problem with the deposit.
When my mom passed in 2008 I kept her first mortgage (situation was complicated but it made sense not to refinance in my name) and transferred title from the Trust's name to my Trust. I sold the condo this last July nine years after she passed.
You'll want to submit paperwork which authorizes you to have access to the account. I think I had to provide the death certificate.
The only (minimal) complication was after the loan was paid off I got a check for around $50 made out to "Estate of Carefree's Mom". I Since I had closed the estate seven years before there was no Estate bank account. I simply did a mobile deposit on my phone and sign my name with TTEE. No problem with the deposit.
Every day I can hike is a good day.
Re: Paying off house that is in estate
Are you sure the mortgage isn't due now as the result of change of ownership?
Gill
Gill
Cost basis is redundant. One has a basis in an investment |
One advises and gives advice |
One should follow the principle of investing one's principal
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Re: Paying off house that is in estate
The mortgage is not due. The bank knows I am paying it. We have already determined I cannot assume the mortgage. My plan is to pay it monthly until someone says I have to take ownership. That means keeping money liquid to do so. I could do that now if necessary. It would be easier in 2018. My question is does it makes sense to keep cash in savings account just for the purpose of paying the mortgage off in four to six months.
Re: Paying off house that is in estate
Why?Determined wrote: ↑Thu Oct 05, 2017 9:25 pm We have already determined I cannot assume the mortgage.
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Re: Paying off house that is in estate
Since the home is is a trust is there any reason that the condo could not be sold now?
In addition to getting it sold while the housing market is still hot, like it is in many areas, that would also save the monthly fees of holding it until the estate is settled then putting it on the market.
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Re: Paying off house that is in estate
I asked the bank. They said the type of mortgage could not be assumed.denovo wrote: ↑Thu Oct 05, 2017 11:26 pmWhy?Determined wrote: ↑Thu Oct 05, 2017 9:25 pm We have already determined I cannot assume the mortgage.
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Re: Paying off house that is in estate
I currently live in the condo that is in estate. The house in trust will be sold after we have the chance to go through it.Watty wrote: ↑Thu Oct 05, 2017 11:41 pmSince the home is is a trust is there any reason that the condo could not be sold now?
In addition to getting it sold while the housing market is still hot, like it is in many areas, that would also save the monthly fees of holding it until the estate is settled then putting it on the market.
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Re: Paying off house that is in estate
But you don't have to. Under Garn St. Germain banks can't exercise the due on transfer clause in a loan if the property is transferred to a Living Trust or to a family member under the terms of a will.Determined wrote: ↑Fri Oct 06, 2017 11:49 amI asked the bank. They said the type of mortgage could not be assumed.denovo wrote: ↑Thu Oct 05, 2017 11:26 pmWhy?Determined wrote: ↑Thu Oct 05, 2017 9:25 pm We have already determined I cannot assume the mortgage.
See section (d) 5
https://www.law.cornell.edu/uscode/text/12/1701j-3
Every day I can hike is a good day.
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Re: Paying off house that is in estate
Thanks. I forgot about that. I had mentioned it to my brother this summer.Carefreeap wrote: ↑Fri Oct 06, 2017 5:08 pmBut you don't have to. Under Garn St. Germain banks can't exercise the due on transfer clause in a loan if the property is transferred to a Living Trust or to a family member under the terms of a will.Determined wrote: ↑Fri Oct 06, 2017 11:49 amI asked the bank. They said the type of mortgage could not be assumed.denovo wrote: ↑Thu Oct 05, 2017 11:26 pmWhy?Determined wrote: ↑Thu Oct 05, 2017 9:25 pm We have already determined I cannot assume the mortgage.
See section (d) 5
https://www.law.cornell.edu/uscode/text/12/1701j-3
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Re: Paying off house that is in estate
You're welcome and I'm happy to help. This is not information that Banks volunteer. Also their employees can give out incorrect information. I actually had one employee from Greenpoint Mortgage advise me that my late mother could not have transferred title to her Living Trust because the bank wouldn't have allowed it. <rolls eyes> But my favorite was a later call from the same bank trying to encourage me to formally assume the loan "so that I could get credit for it on my credit report and deduct the interest". Yeah, right! I want to have subprime loan in my name and have even more debt added to my debt ratio. I sold that property about a year later after it went through an expedited probate (six months!) in CA.Determined wrote: ↑Sat Oct 07, 2017 6:53 amThanks. I forgot about that. I had mentioned it to my brother this summer.Carefreeap wrote: ↑Fri Oct 06, 2017 5:08 pmBut you don't have to. Under Garn St. Germain banks can't exercise the due on transfer clause in a loan if the property is transferred to a Living Trust or to a family member under the terms of a will.Determined wrote: ↑Fri Oct 06, 2017 11:49 amI asked the bank. They said the type of mortgage could not be assumed.denovo wrote: ↑Thu Oct 05, 2017 11:26 pmWhy?Determined wrote: ↑Thu Oct 05, 2017 9:25 pm We have already determined I cannot assume the mortgage.
See section (d) 5
https://www.law.cornell.edu/uscode/text/12/1701j-3
I had no problem deducting the interest on the loan for the other property during the 8 years it was titled in my Trust's name. I don't know if these bank employees were just ignorant or coached to give misleading info but I wasn't pleased.
Good luck with your situation.
Every day I can hike is a good day.
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Re: Paying off house that is in estate
Carefreeap wrote: ↑Sat Oct 07, 2017 3:44 pmYou're welcome and I'm happy to help. This is not information that Banks volunteer. Also their employees can give out incorrect information. I actually had one employee from Greenpoint Mortgage advise me that my late mother could not have transferred title to her Living Trust because the bank wouldn't have allowed it. <rolls eyes> But my favorite was a later call from the same bank trying to encourage me to formally assume the loan "so that I could get credit for it on my credit report and deduct the interest". Yeah, right! I want to have subprime loan in my name and have even more debt added to my debt ratio. I sold that property about a year later after it went through an expedited probate (six months!) in CA.Determined wrote: ↑Sat Oct 07, 2017 6:53 amThank you again. The bank is definitely not a help, and I read about Garn St. Germain on my own. There is a personal and business relationship at this bank (5/3) from my dad's small business. It's taking a while to untangle everything with various loans and accounts. I am working on moving everything but the mortgages and loans. Their savings and checking accounts are almost worthless.Carefreeap wrote: ↑Fri Oct 06, 2017 5:08 pmBut you don't have to. Under Garn St. Germain banks can't exercise the due on transfer clause in a loan if the property is transferred to a Living Trust or to a family member under the terms of a will.Determined wrote: ↑Fri Oct 06, 2017 11:49 amI asked the bank. They said the type of mortgage could not be assumed.
See section (d) 5
https://www.law.cornell.edu/uscode/text/12/1701j-3
Thanks. I forgot about that. I had mentioned it to my brother this summer.
I had no problem deducting the interest on the loan for the other property during the 8 years it was titled in my Trust's name. I don't know if these bank employees were just ignorant or coached to give misleading info but I wasn't pleased.
Good luck with your situation.