'I may not — likely will not — live long enough to pay off the loan, or even conclude the 11 years remaining on my current mortgage, for that matter.'
Dear MarketWatch, I hope you can help me figure this out. I am 69 years old and will turn 70 at the end of the month. I’ve been offered a cash out refinance loan and need to decide whether to take a 15- or 30-year loan. My monthly obligation would obviously be higher for the 15-year loan.
My brother and I have been estranged since 1990. I don’t intend to bequeath him anything of value — he ripped me off big time when our mother died, besides the fact I don’t actually have anything of much value. I don’t wish to leave him a mess. He is 67 years old, and who knows if he’ll be living when I die. Then there’s my niece, his only child, whom I barely know. She’s never attempted to rectify that fact since becoming an adult. She’s 38 years old, is single and has no kids.
When I die, who gets stuck with the unpaid balance? Does the lender assume it? Doesn’t someone have to deal with whatever problem there might be, or receive the balance if it’s sold? Am I right that it’s irrelevant if I take a 15-year or 30-year loan as I might die before either is paid off? Dear Refinancing, I want to start by addressing your question about the length of the loan term, since I worry that you might be understating the difference between a 15-year loan and a 30-year loan.
For whoever gets the house when you die, it won’t make a difference whether the mortgage had a 15- or 30-year term when it comes to resolving the debt. Indeed, when we die, our housing-related debts still must be paid. When the title transfer happens via an inheritance, laws typically protect the heir. They can assume the mortgage and continue making payments. In some cases, they can have the mortgage transferred into their name, or they can sell the home to pay off the loan and pocket the proceeds that are left afterward.If I may overstep just a bit, I would advise you to reconsider who is worthy of receiving your inheritance.
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