If my mother-in-law lives with us and has a life estate on our deed, can we take out a mortgage on the property?

UPDATED: Mar 27, 2012

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If my mother-in-law lives with us and has a life estate on our deed, can we take out a mortgage on the property?

Does she relinquish her life estate rights if she subordinates herself to the mortgage lender? Does anyone loan to borrowers who have life estates on their deeds?

Asked on March 27, 2012 under Real Estate Law, New Hampshire


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Theoretically, yes, she could.  From the way that you have phrased the question here it is clear that a lender will not lend on the property that has a life estate unless the life tenant subordinates her interest to the lenders.  In essence a subordiantion agreement gives the lender precedence over the life tenant's interest.  I would double check the state law and see if that is legal in any event.  Good luck.

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