can the loan be transferred on wife’s name when husband passes away

Hi,

Me and my husband own a house in Seattle, Washington. We both are on title but
the loan is just on my husband’s name. He passed away recently and as soon as
he passed away, we informed the bank/lender and asked to keep the payments on
hold, so that i can sell off the house. Lender agreed on that. But now, i want
to keep the house and rent it out. Currently, I am in India and not working.
Before that, I worked in USA for 13 months. I want to come back to USA in
October or November and start working again. While I am in India, Will it be
possible for me to keep the house and rent it out. Can the loan be transferred
at the same interest rate.

Thanks,
Swathi.

Asked on June 1, 2017 under Real Estate Law, Washington

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

It CAN be transferred to you, but only with  the consent of the lender, which must be freely given. Commercial mortgages and most private mortgages contain terms or provisions which bar "assignement" or "assumption" of a loan (another person taking it over) without the lender's consent. (Often, all assignment, etc. is barred, but the lender legally could still permit it if it chose.) Most lenders will not let the loan be taken over: they would prefer to have the loan be paid off by the person refinancing or taking out a new loan, since that way, there are refinancing, application, etc. fees to earn, and "resetting" the loan with a new one means that, given the typical actuarial tables, that more interest on the new loan is front loaded and will be paid, whereas if they let you keep paying on an existing loan, the payments contain a higher percentage of principal.


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