Inherited-property lending is its own small world: the borrower is often a trust or an estate, the timing is set by tax deadlines, and many banks simply don’t do it. We do it routinely. Here is the high-level map — and yes, we can take care of it for you.
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One heir keeps the home — a sibling buyout
A parent leaves the home to several children; one wants to keep it and pays the others for their shares. The money usually comes from a third-party loan made to the trust or estate itself, before the property is distributed — the other heirs receive their shares in cash, and the keeper takes title with the financing already in place.
The order of operations decides the property-tax outcome: structured correctly, the transfer can remain parent-to-child and eligible for the Prop 19 exclusion; structured casually as a sibling-to-sibling deal, it is reassessed with no exclusion available. This is the most technical topic on this site — nothing gets signed before your estate attorney has seen the structure. Arranging exactly this kind of loan, in the right order, is what we do.
A reverse mortgage becomes due at the borrower’s death. Heirs get an initial window of about six months, extendable in 90-day increments while actively selling or arranging payoff — and the servicer’s deadlines are real. To keep the home, the payoff is the loan balance or 95 percent of appraised value, whichever is less; that payoff usually means a new loan in the family’s name, which is a normal thing for us to arrange.
You can also sell and keep any equity above the payoff, or walk away with no recourse. What loses options is silence — respond to the servicer early and everything stays on the table.
Property taxes, insurance, cleanout, repairs before a sale — estates often need money months before any money arrives. The standard tools, in rough order of preference: documented advances from heirs, a short-term loan to the estate or trust secured by the property, or an accelerated sale. We arrange the middle one — and we’ll say so plainly when one of the other two is the better answer.
Probate cash-advance companies that buy a share of an inheritance at a discount are expensive money dressed as convenience.
Good news first: federal law (the Garn-St Germain Act) prevents a lender from calling a loan due when the home passes to a relative at death — an occupying family member can generally keep paying the existing loan at its existing rate. Heirs are not personally liable on a loan they didn’t sign; it stays attached to the house, and it’s paid off at closing if the family sells.
A refinance only enters the picture when it improves something — a buyout, a reverse-mortgage payoff, or terms that actually work in the family’s favor. No panic required.
Financing is offered through AltDoc Loans, NMLS #340925; Kenneth Lee Schisler, Broker, NMLS #328993. Equal Housing Opportunity. This page is education, not a loan offer — every loan is subject to credit and property approval, with rates, costs, and terms disclosed in writing before you decide anything. For the tax and legal side, a CPA or estate attorney should review your specifics.