For generations, families have passed down assets and heirlooms, but many don’t stay in the bloodline. According to recent data, almost 70% of people intend to create passive income by selling things they were given through a will.
One of the most common things heirs receive is homes, but what happens if you aren’t interested in managing inherited mortgages? Whether you buy or sell an inherited property, it helps to see the larger picture. Our team hopes to enlighten you on the benefits of selling and the work involved with keeping the home.
Read on below to discover all there is to know about inheriting a house with a mortgage!
What Does Inheriting a House With a Mortgage Look Like?
Soon after a loved one passes, you may attend a meeting with a legal expert, the executor. The executor is appointed by a probate court and shares the information within the will with family members and affected persons.
Within 60 days of being appointed, the executor will tell all parties to administer assets, debts, and other obligations. After you receive the paperwork, you must look into insurance, taxes, and leins to maintain ownership in the meantime. This is a good time to order an appraisal if you want to sell.
A family estate planner or lawyer can assist with filing legal documents. While the experts secure the property, you can focus on the next steps. Assessing the condition of the property and home should be at the top of your list.
From this point, the path can go in several directions. Ultimately, heirs have three options.
You can choose between the following:
- Keeping the home
- Selling
- Renting
This decision requires careful thought and can be a struggle between the heart and the head. According to the American College of Trust and Estate Counsel, simple estates are often settled within six months. Complications and difficulty making a decision, however, can extend this timeline.
Reasons People Inherit Homes
Recent Harvard data shows that more than 30% of single-family homes are rented. Buying may seem impossible when the savings account can’t grow, but you’ll take a shortcut if you become an heir.
While there are numerous ways to inherit property, the most common way is through a will. A loved one likely included you to take ownership of the home or land in their Last Will and Testament. An attorney will review this legal document to ensure a smooth transfer.
Another way people inherit property is when it is gifted or “sold” to them. Relatives often do this if they want to downsize without letting the home leave the family. Although some states offer transfer on death deeds, Pennsylvania is not included.
Taking Over the Home
Many emotions may arise when you take on a home that you’ve inherited. While you should mostly feel excitement and inspiration, some people have mixed feelings about their gains.
It’s important to understand the responsibilities and what it will mean to be a new homeowner. Whether you’ve owned homes or not, the process looks different when inheritances are involved. Our team is here to offer info and can get you a cash offer if you don’t want to keep the keys.
If you decide to take ownership, you don’t want to overlook factors in your anticipation. Below are a few to consider when making your inherited property decisions.
Additional Responsibilities
Further tasks and responsibilities will inevitably arise if you’re inheriting a house with a mortgage.
The most essential responsibility is to start paying off the outstanding mortgage dues. This can be a challenge if you’re already paying rent or mortgage payments on another home. If you move into the new property, you can relieve yourself of some of the financial burdens.
When two homes are under your care, it can quickly get overwhelming. With First Choice Home Buyers, you can find a quick resolution to reduce properties and get cash in your hands.
Our team works with several counties in Pennsylvania, including:
- Dauphin County (Harrisburg)
- Cumberland County (Mechanicsburg)
- York County (York)
With First Choice Home Buyers, you won’t have to stress about a home’s condition before selling. We also purchase vacant lots with the potential to be re-developed to further assist people in the community.
As a Pennsylvania property owner, you must pay an inheritance tax, but spouses are exempt. If you aren’t related to the deceased, tax rates will likely increase.
There are a few tax advantages to inheriting a home, but becoming a landlord can be demanding. Consider keeping up with maintenance costs and dealing with tenants if you intend to rent. These factors can become time-consuming and interrupt your full-time job.
Opportunity to Increase Revenue
Did you know that property ownership is ideal for investment portfolios? If you decide to keep the property, you can turn it into passive income by renting out the space.
Depending on the property, you can rent out a room, half the home, or the entirety of the space. This is a great way to get cash in your pocket without having to invest in another property independently. While this can come with large rewards, you must understand the risks involved.
Without thorough research on potential candidates, the home’s condition could become damaged. You must thoroughly screen applicants to ensure they can afford payments and are responsible for caring for the home.
Benefits of Becoming an Heir
With high interest rates and housing prices, many people find themselves wishing for more affordable homes. Although heirs don’t receive anything unless unfortunate events occur, there is still something to be positive about.
A loved one could have sold their assets and made a profit, but in these cases, they hoped to share the wealth. Becoming an heir is honorable and can say a lot about someone, even after they’ve moved on. It’s important to focus on the intentions behind a will and make the most of untimely events.
When you become an heir, you may get a comfortable piece of property, but the home and land also come with history. You and your children can grow up in the same home and community. Not only is this a chance to increase your assets, but it can strengthen your family.
Potential Complications
Owning property can feel like freedom, but some people are surprised to discover what lies beneath. If you want to prepare yourself for ownership or listing, you must understand the risks.
Property division among family members and shared ownership can result in problems. Since death and grief can be difficult to confront in America, arguments and negative feelings often arise. Our team can help get cash in everyone’s hands so the difficult transition doesn’t have to go on longer than necessary.
Capital gains tax will also become a factor if you sell the property within the first couple of years. Even if the inherited home was bought decades ago, you will be responsible for paying a percentage of the current market value.
If the deceased had a reverse mortgage, complications can arise in the underwriting phase. This can be an issue if you want to keep the home, but some lenders may be open to a short sale.
Find Relief Through Selling
If you’re not interested in keeping the home you’ve inherited, you don’t have to feel stuck. Some people assume the mortgage because they feel obligated, which can worsen feelings associated with the home.
Typically, selling inherited houses doesn’t take long and can relieve you of burdens. With First Choice Home Buyers, you can receive a fast and fair cash offer without having to list on the market. Understanding your options can help you save time and money, especially during a difficult period.
There are fewer risks involved with selling, especially with our team. Our quick transactions can relieve you of responsibilities so you can move forward.
Here are a few reasons why people consider selling an inherited home:
- Not in a desirable location
- Freedom from financial & home responsibilities
- Financial benefits
- The home is in a poor condition
- Emotional difficulties
Discuss each option with impacted family members (like your spouse or children). While the home may initially seem appealing, other factors will impact your decision.
Request a Cash Offer
Inherited homes can create a lot of stress, especially if they aren’t nearby. If you want to get a home off your hands quickly, our team can help in the Harrisburg, Pennsylvania region.
Before calling a realtor, it’s worth diving into cash offers to avoid the hassle of listing. At First Choice Home Buyers, you can expect a win-win transaction that’ll result in cash in your pocket. Not only is our team experienced with local banks and regulations, but we also deal with complicated situations.
Our process is composed of five simple steps:
- Call us at (717) 366-9203
- Let chat!
- You’ll receive an offer
- A contract will be shared
- Closing
If you’re interested in learning more about how First Choice Home Buyers can help read our reviews. Previous clients frequently share testimonials about how our team has helped them. These real-life scenarios can help you gain trust in our team and discover real estate solutions.
List Your New Home on the Market
Keeping inherited homes with the intent to sell is a common path. While this can increase responsibilities temporarily, it could put some extra money in your account.
Listing an inherited home as-is can be fairly simple, and you can do it with or without an agent. This can be time-consuming, and if the home needs upgrades, it could impact your traffic on the market. If you’ve inherited a home that’s outdated and needs attention, you should consider a more reasonable price.
Making upgrades and home repairs before listing, however, can increase the home’s value. If the home is move-in ready, potential buyers will have an easier time imagining themselves living there. This is an ideal path to take if you have the excess cash and the drive to make more money.
If there are multiple owners of the property inheritance, things can get tricky. Take a look at our selling guide to ensure each owner gets a fair portion of the sale.
How Can First Choice Home Buyers Make a Difference?
For decades, First Choice Home Buyers has supported Pennsylvania counties by purchasing homes for cash. Unlike our competitors, we are passionate about making a positive impact on locals by tailoring our services.
Before the transaction is complete, you will discover our “win-win” scenario to feel confident. We are here to inform you of the various options we offer since not all homeowners fit the same mold. Our team will treat you with respect and care, making you feel like you’re part of the First Choice family.
Depending on the plan, you can close on a home in as little as 48 hours. This can be a significant benefit if you want to relieve yourself of paying another mortgage on an inherited home. When you apply for a fair cash offer, no obligations will be associated with the request.
At First Choice, you can expect premium real estate services and fair prices, but we do far more for the local area. Our team works with Hanoverdale Church and the Harrisburg Bethesda Mission. Both of which are men’s and women’s shelters, to uplift the community.
Make the Most of Your Inherited Home in Pennsylvania
Inheriting a house with a mortgage will significantly impact your life, whether you maintain ownership or sell. If keeping the family home in your name isn’t an option, there are other ways to avoid the demand for property needs.
To avoid stressors and difficult emotions, work with our team to move on without letting the home gather dust. If you have ties to the home or see it as a financial asset, some work will be involved. Consider your options to ensure you make the most sensible choice for your finances and well-being.
If you need help from a seamless company and receive a fair offer, contact First Choice so we can work together!
