When you inherit a property that was owned outright, there are still a host of bureaucratic hoops to jump through, so of course things can get even more complex if the house still has a mortgage attached to it.

If you find yourself in this situation, here are a few things to keep in mind so that you can hopefully resolve it without as much stress and hassle.

The mortgage repayments become your responsibility

The main obstacle to deal with is that being bequeathed a property which remains mortgaged means that you become legally responsible for keeping up whatever repayments still apply.

Failure to pay will of course mean that the lender has the right to repossess the house and then take charge of its sale in order to recoup the rest of the cash that is owed.

This is obviously not a desirable outcome from your perspective, so you of course have the option to take on the repayments and retain ownership of the property, perhaps renting it out to a third party in order to make sure that this is not as much of a burden on your finances. Alternatively, you could choose a policy like a mortgage protection insurance, which can help pay your monthly mortgage payments if you are unable to work due to illness, a serious injury, or redundancy. If interested in buying MPI for yourself, you might first want to look at websites like mortgageprotectionreviews.com/mortgage-protection-insurance/ that can give you a better insight about the topic and can even help you compare the reviews about various mortgage protection plans. The reason it might be beneficial to you because it can serve as a safety net to cover your monthly mortgage amount if you are not able to do so because of a variety of circumstances.

There are several other alternatives that could help you deal with such scenarios. Another route would be to hire a realtor Lynchburg (or wherever your property is located) who can help you sell the property yourself. You can use the lump sum you receive to pay off the rest of the mortgage and keep what is left afterwards as your liquid inheritance. Time is often of the essence in the case that you inherit a house with a mortgage, so looking to sell house fast is better than dragging your feet through indecision.

Before you plan to sell the house, you may want to have a full house inspection to ensure the home’s safety, accepted warranty protection, or mortgage loan fulfillment. If you are already stuck with a mortgaged property, you may want to think about that the next time you buy a home. If you live in Austin, for example, you might consider hiring an Austin Home inspector from Careful Home Inspections, who can provide you with a detailed inspection report as well as any recommended repairs or improvements for the home or anything that requires mandatory attention. If you live somewhere else, you can look for similar local inspection agencies, which might assist you with a complete home scrutiny.

Taxes may apply

Keeping abreast of the inheritance tax rules which apply in the UK is a good idea in normal circumstances, and is essential if you are due to be the beneficiary of a person’s will.

In most cases, you will not need to pay tax on anything you inherit, including properties, so long as the total value of the deceased’s estate is under 325,000. Anything over this amount is taxed at 40%, or at a reduced 36% rate if at least a tenth of the estate is being left to good causes.

Perhaps most importantly, even if your inheritance falls below the minimum taxable threshold mentioned above, you will still need to let HMRC know about it, so that they can keep their records up to date. Failing to disclose this inheritance might result in issues further down the line.

In addition, if you decide to keep the house and instead rent it out in order to cover the mortgage costs, this amount may also be taxable, depending on the value of the property and the total value of the estate. Taxes will also apply if you do eventually decide to sell the house once the mortgage has been paid off.

Ultimately if you are concerned about taxes and fees, talking to an expert is essential, as everyone’s circumstances are unique.

Share of ownership matters

Another significant aspect of inheriting a house with a mortgage is that you may only be responsible for and entitled to the portion of the property which counts within the estate of the deceased. If other owners are still alive, or the property is being jointly inherited by several parties, or if it is held in trust, you will not be the sole beneficiary or the only one responsible for the monthly repayments.

Again, getting specialist assistance is wise, rather than assuming that you will be capable of navigating this complex process yourself. And the faster you take action, the easier it will be to handle an inheritance of this kind.