Homeownership Guidance, Advice and Blogs

As the Director of Affiliate Relations at HomeFree-USA, I’ve always been fascinated with how people handle their money. Like everyone else, I’ve had my financial ups and downs. In fact, it took me 32 months to pay off $32,000 in credit card bills and build up a six-month emergency fund. While that was a very difficult period, I am grateful – and wiser -- for the experience.

Through my personal experiences and working at HomeFree-USA, I’ve gained a ton of insight that I feel compelled to share. You’ll find those lessons here. Feel free to take the thoughts and ideas that resonate with you most and put aside the rest for later. I look forward to sharing my journey.

HELP! I just inherited a property and don't know what to do

Every day people pass away and leave their home to relatives or loved ones. The problem: the recipient may not know anything about homeownership OR they have to decide what to do with the property in conjunction with people they don't see eye to eye with. What do you do when someone's largest financial asset in now in your hands?

I spoke to Imelba Rodriguez of Bridge Street Development Corporation in Brooklyn, NY who runs a program called "Keep It In The Family." Here's what she had to say:

1) Determine all debts associated with the property. Is there still a mortgage? Regular, reverse, assumable? All obviously require a monthly payment, but the reverse mortgage balance may be due once the homeowner passes away. An assumable loan allows the beneficiary to transfer the mortgage into their name with the same terms. Contact the mortgage company immediately to find out the loan terms and your options.

Some borrowers have insurance that pays off their entire mortgage balance in the event of death. Check with their mortgage company and insurer to see if this is in place.

2) Maintenance expenses. This is often where beneficiaries go awry and possibly lose the home. Even if there's no mortgage, utilities, homeowners insurance, and property taxes are always due. While utilities are paid monthly, typically taxes and insurance are due every 6 months.

Note: cities and counties do not play when it comes to property taxes - many people have had their homes foreclosed simply because of overdue tax bills.

3) Run it through the courts. Are there any liens associated with the property that have to be satisfied, for example property taxes that the homeowner did not pay while alive? Old debts could haunt the new owners so make sure you're up to date with all outstanding creditors.

4) Put someone in charge. If there are multiple beneficiaries, choose one person to speak and implement on everyone's behalf. This person should be trustworthy, organized, and have the most knowledge of estates and/or homeownership. He/she also must be committed to looking out for the best interest of the entire family, not just themselves.

5) Come to a decision, put it in writing. When money is at stake it's easy to forget why certain decisions were made and how they are to be executed. Create a single document, have all parties sign, then give everyone a copy. If the action plan has to be altered, all parties must unanimously agree to the change.

6) Seek an expert's opinion. If you're in the New York City area, talking to Bridge Street would be immensely beneficial. Similar nonprofit organizations across the country also provide this service. If none are in your area, research the tax and legal implications of selling or retaining the property, and speak to an attorney or tax professional if it gets too complicated. Again, make sure that person is trustworthy and has a great reputation.

And so it is.