What to do family with a mortgage if you died its owner

What is a mortgage

In accordance with the effective legislation, the mortgage is a collateral agreement of immovable property, including land. Property mortgage may provide the debtor secured her obligation and the third party. Provided in the mortgage, the property remains in the possession of the mortgagor.

The mortgage agreement is in writing and is subject to state registration. Typically, a mortgage agreement the subject of which are the apartments and houses is on the long term (20 years or more).

In case of default of the obligation secured by the mortgage, the lender has the right to satisfy their demands, drawing a penalty on the mortgaged property. The foreclosure of the mortgaged property by the decision of the court or, if so provided in the mortgage agreement, on the basis of Executive notary. To meet their requirements the lender through the sale of the mortgage at auction, or by leaving property in your possession.

What if the debtor died

Signing a mortgage agreement, a bona fide borrower from the beginning you should protect your family members from debt burden in case of his death. This can be done by registration of the contract of insurance of financial and other risks. As a rule, now all the banks at the conclusion of mortgage contracts using this scheme.

In addition, to participate in the obligation secured by the mortgage, you can bring a guarantor who is not a relative of the borrower. In this case, after his death, the responsibility for debts will be borne by the guarantor, and not family members. Similar situation will occur when the mortgage is granted on account of obligations of multiple borrowers. Then, in the case of the death of one of them, the responsibility will fall on other borrowers.

Debts of the borrower on a mortgage contract are the object of the inheritance that will be distributed among all members of the family. Therefore, to avoid their repayment, family members entitled to join the law of inheritance. This option is acceptable when they have another place of residence. But then the relatives will not be able to claim not only the estate, but other property of the deceased.

If the borrower's family only residence associated with a mortgage, the most acceptable way out is negotiation with the Bank regarding the write-off, deferred payment, restructuring or other compromise of repayment options.